(Adds context, details of Thai fuel usage)
BANGKOK Aug 28 Thailand's military government
has revamped its domestic fuel pricing mechanism, resulting in a
reduction in gasoline prices and an increase in diesel prices,
the Energy Policy and Planning Office (EPPO) said on Thursday.
The restructuring is aimed at lowering the cost of living
for consumers and will be administered through a cut in fund
collections from oil retailers by the state-owned Oil Fund and
an increase in excise taxes on diesel, EPPO's Director-General
Chavalit Pichalai told reporters.
As a result, retail prices of gasoline will fall by 1.0-3.89
baht ($0.0313-$0.1219) per litre while diesel prices will rise
by 0.14 baht a litre as of Friday, EPPO said.
This is the first time since April 2011 that Thailand has
raised the levy on diesel. The country's retail fuel prices have
been distorted by various populist policies introduced by
previous governments through the Oil Fund.
Under the current subsidies through the Oil Fund, diesel
users pay lower prices at the expense of costly gasoline prices.
In the first six months of 2014, Thailand consumed 376,000
barrels per day (bpd) of diesel and 142,000 bpd of gasoline,
according to energy ministry data. Diesel consumption has risen
steadily after its price was capped at 30 baht a litre in 2011.
The army seized power on May 22 in a bid to restore order
and get the economy back on track after months of political
unrest that hurt economic activity. The energy price reform is
among the military government's priorities.
Analysts said the military government's plan to reduce the
cost of living could imply that an expected increase in domestic
gas prices will not happen soon and that could dampen earnings
of Thailand's top energy firm PTT Pcl.
Shares of PTT fell almost 3 percent on Thursday due to
concerns about the new energy price structure.
PTT, the country's sole gas supplier, has shouldered the
loss from fuel subsidies given it has to import liquefied
petroleum gas (LPG) at global prices and sell them at the
government-fixed price of $333 per tonne.
(1 US dollar = 31.9200 Thai baht)
(Reporting by Pracha Hariraksapitak and Khettiya Jittapong;
Writing by Viparat Jantraprap and Orathai Sriring; Editing by