As fuel prices rise worldwide, citizens of Thailand have begun panic-buying fuel. In response, the Thai government ordered a series of measures to curb fuel anxiety.
Fuel prices in Thailand
For more than a month, the US-Iran war has caused a global energy crisis following the closure of the Strait of Hormuz. Countries around the globe are still experiencing the effects of this closure domestically as the cost of fuels skyrocket.
Prior to the oil crisis, Thai citizens consumed up to 67 million litres of oil per day, less than the country’s daily oil production rate of 77 million litres per day.
As the war on Iran continues and fuel prices increases, fuel anxiety and panic-buying among Thai citizens have continued to develop, causing daily consumption to escalate to 87 million litres per day.
In Thailand, the government has initially responded with fuel subsidies. While this quelled fuel anxiety for some time, these subsidies were retracted in later March, causing petrol prices to rise by 22 per cent and diesel to rise by 18 per cent or THB 6 (AUD $0.7) per litre. According to Recessary, this is the largest single increase in Thailand’s history.
Hoarding, smuggling ensue
Thailand has continued to face cases of hoarding, panic-buying, and even smuggling. By mid-March, the country’s police force arrested oil truck drivers attempting to smuggle 20,000 litres of diesel across the border to Myanmar.
On 19 March, a commercial storage facility was found to be hoarding 330,000 litres of fuel. Officials accused this facility of selling overpriced oil to neighbouring petrol stations.
“Strict enforcement measures will be applied against profiteering, hoarding, overpricing and other illegal activities,” Prime Minister Anutin told reporters.
The Prime Minister has ordered government officials to “take immediate action” against illegal activities in their respective areas – with the surge in oil consumption prompting the Thai government to remove limits on fuel prices.
The cost of fuel subsidies proved to be too costly for the government to maintain, spending around THB 20 billion (AUD $887 million) in three weeks, or THB 1 billion (AUD $44.3 million) per day.
According to Prime Minister Anutin Charnivrakul, this was “a necessary intervention” to rebalance the nation’s supply equilibrium and deter a national shortage. Minister of Finance Ekniti Nitithanprapas explained that the previously set price caps
On 25th March Thailand’s state Oil Fuel Fund announced the retraction of fuel subsidies on their social media pages. This late announcement caused citizens to rush to their nearest petrol stations and panic-buy before the price hike could ensue the next day.
Losing trust
The Bangkok Post published an editorial, claiming that the people of Thailand are beginning to lose trust in their current administration due to its response to the fuel crisis.
“For the past three weeks, the government’s contingency plan to handle the current oil crisis has failed to reassure the public or prevent hoarding,” the publication wrote.
Though the Thai government removed price caps on fuel, it pledged to support poorer consumers, especially farmers, with financial assistance. In the Phitsanulok province, a local government program distributed 3.2 million litres of diesel to farmers. According to the area’s governor, Kiattisak Trongsiri, this amount of diesel can sustain agricultural work for the whole of April.
In other regions in Thailand, farmers continue to protest and submit demands for government support. Higher fuel prices force farmers to raise operation costs amidst a period of falling prices for rice, ending in losses for their businesses.
“They say there is enough fuel, but in reality, we cannot find it,” said a protest leader to the Bangkok Post.
Other sectors will receive support as well. The Ministry of Finance will provide fuel subsidies for drivers working in public transport and logistics. The country’s fishermen will be given B20 diesel, a cheaper form of diesel made with 20 per cent palm oil, by the Ministry of Transport.
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