Mr Korn said the Government would consider decreasing the oil excise taxes to help relieve burdens of people as the global oil price was aggressively volatile due to the current economic situation. The Government was ready to explain its decision to include the Excise Tax Tariffs bill in the agenda of the special parliamentary session in August this year, he added.
The minister also expressed confidence that the 2009 revenue collection would be less than the projected target by only 170 billion baht. The ministry earlier forecast that the revenue would be lower than the target by 280 to 300 billion baht.
]]>With the price hike of crude in the global market, Dr. Anusorn said it would direct the average price of crude to stand at US$55 a barrel for the whole year. He said crude price should stabilize for the next few days as well.
Dr. Anusorn advised the Government to intervene in the oil prices once retail prices of domestic oil products go beyond 35 baht a liter. When it occurs, he said either excise tax policy or State Oil Fund’s policy could help minimize impacts on the Thai economy.
Dr. Anusorn also agreed with the Energy Ministry’s plan to call off the distribution of benzene 91 as it would help increase the domestic consumption of ethanol up to one million liter a day.
]]>The Energy Minister said the current rising oil price was according to the global market price mechanism. He stated that the Ministry was managing appropriately and would not increase money collection for the oil fund, which was earlier reduced to help shoulder the rise of the Government’s gasoline excise tax of two baht per litre.
The increasing price resulted from OPEC’s stance to maintain its production, after it has was constantly reduced. On the other hand, the demand of benzene is also rising during summer in Europe and the US. In addition, the positive expansion of Chinese and Indian economies are driving up the price of oil as well.
MD Wannarat said the fund could not help bear this problem forever, citing that each month the fund had to take care of about four billion baht and could shoulder oil price at most for four months. He said people needed to save energy consumption too.
Last year, Thailand’s imported energy accounted for 19.5 percent of national GDP, valued at 1.1 trillion from the total imports of 5.9 trillion baht, which was the most important factor leading to Thailand’s trade deficit.
]]>OPEC will probably keep production targets unchanged as long as crude prices remain around current levels and inventory growth continues to slow, according to Barclays’s head of commodities research, Paul Horsnell. The group meets on May 28 in Vienna.
“If they held the meeting today, there’s no reason to change” quotas, Horsnell said in a telephone interview from London. “Prices are stabilizing and starting to nudge up in the direction they want. Seventy dollars is not that far away.”
New York crude has advanced 22 percent since OPEC last met on March 15, when members agreed to keep production quotas unchanged rather than risk damaging the ailing global economy. OPEC announced three output cuts late last year to remove 4.2 million barrels a day in a bid to bolster prices. Oil futures traded at $57.94 a barrel as of 1:02 p.m. London time today.
“Even at $58, it’s not really the level that matters but the trend,” Horsnell said. “Fifty-eight dollars after a gentle rise is very different from $58 after a gentle fall.”
While U.S. crude stockpiles are at their highest in more than 18 years, the slowing trend of inventory growth will be a more important consideration for the group than absolute levels, according to Horsnell.
OPEC’s secretary general and ministers from Algeria and Qatar said last month that members can tolerate a price of $50, less than previous informal targets around $70. Saudi Arabian Oil Minister Ali al-Naimi said April 25 that $50 oil is the country’s “contribution to the world economy.”
OPEC has completed about 83 percent of the output reductions announced last year, according to the International Energy Agency. The 11 members of the group subject to formal limits have a collective quota of 24.845 million barrels a day.
By Grant Smith
Bloomberg