Government should let energy prices float following the market

BANGKOK, 21 January 2011 (NNT) – The Thailand Development Research Institute has suggested that the government should let energy prices float following the market mechanism instead of interfering in the issue for political gains.

TDRI President Dr Nipon Poapongsakorn encouraged the government that it should separate energy goods such as gasoline and electricity from other ‘political products’; otherwise, the government would spend too much budget to subsidize prices to shoulder living costs of the public.

Citing as examples of price intervention by the government, Dr Nipon mentioned the use of the five billion THB oil fund to subsidize gasoline price and the need of about 15 billion THB budget a year to support the free electricity scheme as part of the Pracha Wiwat popularity policy of the government.

The TDRI president said the government should launch new policies to help relieve the cost of living without interfering in the existing budget plans, and should concentrate its assistance on the poor who accounted for about 8% of the total population.

As for the economic growth this year, Dr Nipon expected that the Gross Domestic Product (GDP) would expand by not less than 4% following the global economic revival plus the 80 billion THB village fund of the government, which would be ready for disbursement this year.

The TDRI president however noted that the global energy price, which might soar continuously, would affect energy price in Thailand as well as the national economic expansion eventually.