Some more news.. 
Thai PM orders cut in price of diesel fuel
Bangkok Post: 8 Aug 2009
www.BangkokPost.com
PM orders cut in price of diesel
Energy bureaucrats oppose subsidyMotorists will again enjoy cheaper diesel by two baht a litre starting next week, after Prime Minister Abhisit Vejjajiva demanded that the state Oil Fund subsidise prices.
Diesel prices on Friday were 26.09 baht per litre at the pumps at service stations run by PTT, the nation's biggest diesel seller.The premier backed a proposal by Finance Minister Korn Chatikavanij for diesel price intervention, despite stiff opposition from Energy Ministry officials.
Just two days earlier, Energy Minister Wannarat Channukul had rejected Mr Korn's idea, suggesting authorities cut fuel excise taxes if they wanted to reduce pump prices. Mr Wannarat insists that the fuel levies collected by the Oil Fund are essential to fund long-term development of alternative fuels.
The premier met late Thursday night with Mr Korn and energy officials to seek a solution to the dispute.
The result, said an Energy Ministry official who declined to be named, was that the ministry on Monday would seek approval to suspend the Oil Fund levy of 1.70 baht a litre collected on diesel. Approval is needed from the National Energy Policy Council (NEPC), which Mr Abhisit chairs.
An additional subsidy to oil traders of 0.30 baht would bring the pump price down by two baht a litre.
As well, the premier wants a two-baht reduction in the price of B5 diesel, which contains 2% biofuel. It is subsidised by 0.23 baht a litre. To achieve the bigger cut, officials will have to transfer 6 billion baht from the Energy Conservation Fund to the Oil Fund to cover the expense.Money in the Energy Conservation Fund was originally intended to help pay for mass-transit projects but the government now intends to borrow money elsewhere to fund big infrastructure projects.
"So all of the money will go to help the Oil Fund to pay part of the price for diesel users as the Oil Fund now has accumulated income of 16.8 billion baht, too little to finance the subsidy," the official said.
The source added that Mr Korn had resisted cutting the excise tax on fuel.
"He told us that the excise tax can't be cut because the government's tax revenue was far lower than the target," the official said.
"We tried to explain why we should not intervene in diesel prices. We even offered to cut the levy by 0.50 baht a litre to the Oil Fund and 0.50 baht to the Energy Conservation Fund, but they [Mr Abhisit and Mr Korn] said that would be not enough, that diesel must be lower than 30 baht a litre,'.
The source added Mr Wannarat was upset with the outcome of the discussions.
"This is haunting us," the Energy Ministry Official said, recalling past experience. "The Oil Fund sank 100 billion into debt because of subsidy schemes when Thaksin Shinawatra led the government."
Initiated by former energy minister Piyasvasti Amranand, whose stance was to prevent the oil fund being used by politicians as a tool for boosting their popularity.
The Oil Fund came out of debt as Dr Piyasvasti insisted on the importance of raising levies for oil funds in late 2006.
Mr Korn said yesterday that cutting the excise tax was not a good solution to ease motorists' burden as the government needed tax revenue for public utilities and social services such as the farm product price guarantees and free tuition fees.
"So initially, we should allocate capital from the Oil Fund to stabilise oil prices," Mr Korn said.
He also refused to specify a level of world crude prices at which the government would start to intervene in the market.
A senior Energy Minister official said on Thursday that oil would have to reach $90 a barrel, compared with $71 now, before subsidies would return.
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