Soaring oil prices won't change gas guzzling habits if government pays for it. Crippling public debt like Greece's may result.
Experts warn against fuel subsidies, Developing mass transit 'a better policy' by Yuthana Praiwan
Energy experts and economists warn that continuing the government's energy subsidies could throw the country into financial chaos
We expect the energy price-fixing policy is here to stay no matter who wins the election," said Praipol Khumsap, an economics lecturer at Thammasat University, speaking at a seminar in Bangkok yesterday.
But he warned lower energy prices will drive up demand. Oil imports, which accounted for 17% of imported goods last year, are projected to skyrocket if the local oil price cap continues, leading the country into a trade deficit and finally to fiscal collapse.
"As an economist, I disagree with any plans by the government to fix energy prices, as in the long term that can lead to a fiscal deficit and higher public debt such as happened in Portugal and Greece," said Mr Praipol.
Even worse, motorists will no longer care about saving energy, efficient consumption or greenhouse gas emissions.
He said that energy price caps may help ease inflationary pressure, but they also promotes diesel and gas smuggling to neighbouring countries.
Manoon Siriwan, an energy consultant and former executive of Bangchak Petroleum, said the government would do better to spend its fuel subsidy budget on developing mass transit instead.
"Energy-price fixing will discourage development of alternative and renewable energies, energy saving and efficient consumption," he said.
People generally believe that whoever wins the election will continue the subsidies for populist purposes.
Mr Manoon foresees the global oil price being subject to frenetic swings over the next three or four years, with prices possibly rising to US$200 or $250 a barrel.
He also wonders where the government will find more money to keep financing the subsidy programme if oil reaches $150 a barrel in the second half of this year as widely feared.
The state Oil Fund will likely run out, while excise tax is being almost completely waived, said Mr Manoon. More importantly, gas resources in the Gulf of Thailand are being depleted and will likely run out within 15 years.
He said the government had spent nearly 70 billion baht since it began subsidising energy prices last December via the Oil Fund and recently cut excise taxes in a bid to keep the programme going until September.
"That's equal to the cost of building an entire electric train line," said Mr Manoon. "But we're mired in nonsense."
Songtum Pinto, director of macroeconomic policy and analysis for the Bank of Thailand's monetary policy group, said that even though the Thai economy was unlikely to be seriously affected as rising oil prices were offset by robust export growth, the country could lose its competitiveness due to relatively high transport and logistics costs and low efficiency in energy use.
Thailand should instead accelerate development of its mass rapid transit system and marine transport in order to enhance energy efficiency," he said
Transport by rail is generally 3.5 times cheaper than by road and more than seven times cheaper than by boat.
The central bank expects the global oil price will stay at about $110 per barrel on average, the threshold at which the government will supposedly lack the means to continue the subsidies.
(Source: Bangkok Post, Experts warn against fuel subsidies, Developing mass transit 'a better policy', 11/05/2011, Yuthana Praiwan, link)
fuel - a substance such as oil, gas, coal, or wood that produces heat or power when it is burned
subsidies - when the government pays part of the cost of some activity เงินช่วยเหลือจากรัฐ
mass - large numbers จำนวนมหาศาล
transit - the act of moving from one place to another การเดินทางผ่าน
mass transit - transportation or "transit" that moves large numbers of people around a city (such as bus, train, subway, etc)
energy - a form of power such as electricity, heat, or light used to make things work and run such as cars and machines
energy efficiency - using low amounts of energy to get work done
chaos - a situation in which everything is confused and in a mess ความยุ่งเหยิง, ความสับสน a very confused situation ความโกลาหล
fix - keep at one value, prevent value from changing
policy - a set of plans or action agreed on by a government, political party, business, or other group นโยบาย (See Wikipedia)
energy price-fixing policy - a government policy of keeping energy prices fixed, preventing them moving up and down (and thereby making voters happy)
here to stay - will not change for a long time
no matter who - whoever, it does not matter who, is true for any person (winning the elections)
no matter who wins the election - does not depend on who (wins the elections), true in any situation
election - the process of choosing a person or a group of person for a position, especially by voting elect (v) electoral (adj) synonym: the polls การเลือกตั้ง
drive up demand - cause an increase in demand
demand - the need and desire to buy goods and services by households and businesses
projected - the amount that experts believe (forecast) for the future
skyrocket - to increase very quickly ลอยขึ้นสูงอย่างฉับพลัน
local - in this country (here: Thailand)
cap - a limit (cannot go above this level, like a "cap" on a jar; largest amount that it cannot go beyond)
oil price cap - a limit to how far oil prices can rise
trade - the buying and selling of goods การค้าขาย
deficit - when you spend more than you receive (has to be financed or funded by borrowing)
trade deficit - when the value of imports into a country is greater than the value of the exports out of a country
fiscal - related to government spending and budget เกี่ยวกับงบประมาณ
collapse - (of people and business) to fail suddenly; to suddenly be unable to continue or work correctly ล้ม (ธุรกิจ)
fiscal deficit - government spending over the amount the government receives in taxes (which must be borrowed, creating "public debt")
debt - money borrrowed, an amount of money that you owe หนี้
public debt - government debt (the total amount that the government has had to borrow over the years because it spent more than it received in taxes)
efficient - produces a lot from few resources, doing a task with no waste of time, money or energy
consumption - when households buy goods and services การบริโภค (See Wikipedia)
emissions - gases released into the air (from cars, factories, etc), amounts of gas, heat, light, etc. that are sent out การปล่อยออกมา
energy price caps - limits on how high energy prices can go
ease - to make or become less severe, difficult, unpleasant, painful, etc ทำให้ง่าย, บรรเทา
pressure - a force causing change
inflationary pressure - forces at work in the economy causing the overall level of prices to rise in the economy
ease inflationary pressure - reduce inflationary pressure, make inflationary pressure less severe
smuggling - secretly and illegally taking goods or people into or out of a country ลักลอบขนสินค้าหรือคนเข้าและออกจากประเทศอย่างผิดกฎหมาย
executive - the highest level managers in a company
subsidy - helping to pay the costs of something, an amount of money that the government or another organisation pays to help to reduce the cost of a service or product เงินสนับสนุน, เงินชดเชยที่รัฐเป็นผู้จ่ายให้ (the verb form is subsidise)
budget - the plan for spending during a period of time within a company or organization, the amounts of money that an organisation has available to spend on different things during a period (See Wikipedia) งบประมาณ
discourage - to make someone feel like something should not be done ทำให้ไม่อยาก (ทำสิ่งใดสิ่งหนึ่ง)
development - the gradual growth and formation of something
alternative - another choice ตัวเลือก / ทางเลือก another possible way, different from the usual ways
renewable energy - "energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable (naturally replenished)" (See Wikipedia)
populist - politicians who claim to care about the interests and opinion of ordinary people (but may just be using this to further their own selfish goals)
foresee - to believe that some event will happen in the future
global - throughout the world ทั่วโลก
X subject to Y - condition or event Y happens to X and has an "effect" or "impact" on X
frenetic - done fast with a lot of energy, by someone in a hurry
swings - going up and down
frenetic swings - going up and down in a wild fashion (suddenly and unpredictably)
barrel - a standard metal container for transporting and storing oil กระบอก, ถัง,ลัง, บรรจุถัง, บาร์เรล, หน่วยวัดความจุของของเหลว ซึ่งเมื่อใช้กับการวัดปริมาตรน้ำมันปิโตรเลียม 1 บาร์เรล = 36 แกลลอน ในประเทศอังกฤษ ส่วนในประเทศสหรัฐอเมริกา 1 บาร์เรล = 42 แกลลอน
widely feared - many people are afraid of this
state - government รัฐ
Oil Fund - a collection of government money (fund) being used for oil subsidies
run out - หมดไป
excise tax - dealing with taxes made by a government on some types of goods produced and used within their own country ภาษีสำหรับสินค้าในประเทศ
waived - not required
tax waived - not required to pay tax, do not have to pay tax
resources - things such as coal, trees and oil that exist in nature and can be used by people ทรัพยากร
depleted - used up and reduced, so that there is little or nothing remaining
gas resources depleted - the gas that they have is used up already
spent - used ที่ใช้ไป
bid - an attempt to do something ความพยายาม
do X in a bid to Y - do X in order to achieve goal Y
train line - in a system of trains, one length of tracks going from A to B and stopping at stations along the way
nonsense - ideas, behavior or statements that are not true and meaningful เรื่องไร้สาระ, เรื่องไร้เหตุผล, เรื่องที่ไม่มีเหตุผล
mired in - stuck in a place, cannot get out of or leave a place (example: the cart was mired in the mud and could not move forward)
mired in nonsense - stuck in a situation with a lot of nonsense (can't move forward and make progress because of the nonsense)
offset - reduce by moving in the opposite direction, reduce by moving in the opposite direction, counter-balance, compensate in the opposite direction ("x offsets y" means "x reduces the effect of y"), make up for (profits from the manufacturing business offset losses from the retail business) (See glossary)
robust - strong
competitiveness - how well a business can do compared to other firms (does it have lower price or higher quality?) การแข่งขัน
transport - to move people or things from one place to another ขนส่ง
logistics - the activity of transporting, storing, and tracking goods (from factory to consumer) (See Wikipedia and previous article)
efficiency - doing a task well without wasting time, money, resources, waste little time, energy and resources in doing a task (minimize time, energy and resources in performing a task) (See glossary) การทำงานอย่างมีประสิทธิภาพ คุ้มค่าเวลาและใช้พลังงานหรือต้นทุนในการผลิตน้อย เพื่อให้ได้ผลผลิตมาก
accelerate - go faster and faster , at an increasing rate, to cause to happen more quickly เร่ง
rapid - happening quickly อย่างรวดเร็ว
mass rapid transit system - a system for moving large numbers of people around a city (examples: subway, buses, light rail train)
marine - things related to the sea, ocean, and boats เกี่ยวกับทะเล
marine transport - moving goods from one place to another by ship
enhance - to improve the quality, amount or strength of something ทำให้ดีเพิ่มขึ้น, ปรับปรุง
central bank - the main government run bank in a country which controls interest rates, amount of loans and money available in an economy, attempting to maintain a target inflation rate (this is called "monetary policy")
threshold - the level or point at which you start to experience something, or at which something starts to happen จุดเริ่มของประสบการณ์หรือเหตุการณ์ใหม่ๆ
supposedly - believed to be; thought to be เป็นที่เชื่อว่า
lack - not have ขาดแคลน
means - methods; ways วิธี, วิธีการ
lack the means to Y - does not have what is necessary to do Y, lacks resources to do Y