| A planned suspension to the collecting and tapping of the government-run Oil Fund will only be temporary, said Prime Minister-designate Yingluck Shinawatra on Thursday. The Oil Fund, primarily designed to keep domestic diesel prices from rising above a level of 30 baht per liter, will be frozen on temporary basis and no longer collected from oil firms for a certain period of time, according to Ms Yingluck. Without an Oil Fund intervention in the domestic oil markets, the gasoline price, currently in the range of 35 baht to 42 baht per liter, is speculated to drop by 7.50 baht per liter and the diesel price by 2 baht per liter.
The Oil Fund is currently running about one billion baht in the red though an estimated 1.4 billion baht has been collected from the oil firms monthly. After the temporary freeze to the Oil Fund has ended, the money might be collected and available on tap again in the future, the prime minister-designate said.
She said the planned temporary freeze to the Oil Fund is designed to keep the domestic oil prices primarily subject to market mechanisms, given the fact the oil prices have been increased on gradual, yet disproportionate basis while domestic production of alternative energy has remained inadequate.
She added her government’s populist campaign will not cause a remarkable rise in inflation as feared but will reduce the people’s costs of living and increase their incomes.
The coalition government, led by the Puea Thai Party, has planned to offer a start-up salary for employees at government units and state firms at 15,000 baht per month and a minimum wage of 300 baht per day from Oct and Jan respectively.
Under the government’s economic stimulus schemes, the corporate income tax will be substantially cut so the private sector will be able to invest more in their businesses and pay more to their employees.
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