A CITIZENS’ GUIDE TO ENERGY SUBSIDIES IN THAILAND

The document provides a comprehensive overview of energy subsidies in Thailand, detailing the mechanisms used to subsidize LPG, NGV, diesel, electricity, and biofuels. It argues that while these subsidies aim to ensure affordability, they often disproportionately benefit higher-income groups, encourage wasteful consumption, and create fiscal strain on the government and state-owned enterprises. The guide outlines the negative impacts of these subsidies, such as fuel smuggling and environmental degradation, and suggests reform strategies based on international experience, emphasizing the need for market-based pricing and targeted social assistance.

• Thailand's energy subsidies for fuel and electricity totaled approximately 194,918 million Thai baht (THB) in 2012, though this is considered a minimum estimate as many subsidies are not quantified.
• Universal energy subsidies for diesel, LPG, and NGV disproportionately benefit higher-income earners who consume more fuel; for example, only 5% to 6% of LPG and diesel subsidies reach the poorest 20% of the population.
• The Thai government maintains a price cap on high-speed diesel (HSD) below 30 THB per litre, primarily through excise tax exemptions which resulted in over 108 billion THB of foregone revenue in 2012.
• LPG subsidies create incentives for illegal use and smuggling; cooking LPG is often used illegally by the industrial sector, and subsidized LPG is smuggled into neighboring countries where retail prices are higher.
• Natural Gas for Vehicles (NGV) is heavily subsidized through capped retail prices, tax exemptions, and low-interest loans, leading to significant losses for the majority government-owned distributor, PTT.
• Electricity subsidies are more targeted than fuel subsidies, providing free electricity to residential consumers using less than 50 kWh per month as of 2012.
• Biofuel subsidies are implemented through tax reductions and mandatory blending policies; biodiesel producers are guaranteed a market regardless of price due to the mandatory blending requirement.
• The Oil Fund, established in 1979 to shield the economy from price volatility, has faced significant deficits, requiring government transfers and loans to cover subsidy costs.
• Energy subsidies can lead to environmental degradation by increasing fossil-fuel-related greenhouse gas emissions and local air pollution, although some subsidies (like LPG for cooking) may reduce deforestation by replacing firewood.
• Successful subsidy reform requires a transition to market-based prices, the creation of competitive energy markets, and the implementation of targeted mitigation measures to protect vulnerable households.

APA

International Institute for Sustainable Development (2013). A CITIZENS’ GUIDE TO ENERGY SUBSIDIES IN THAILAND. https://www.iisd.org/gsi/sites/default/files/ffs_thailand_czguide.pdf

Chicago

International Institute for Sustainable Development. A CITIZENS’ GUIDE TO ENERGY SUBSIDIES IN THAILAND. 2013. https://www.iisd.org/gsi/sites/default/files/ffs_thailand_czguide.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=A CITIZENS’ GUIDE TO ENERGY SUBSIDIES IN THAILAND |date=April 2013 |url=https://www.iisd.org/gsi/sites/default/files/ffs_thailand_czguide.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2013citizens, author = {{International Institute for Sustainable Development}}, title = {{A CITIZENS’ GUIDE TO ENERGY SUBSIDIES IN THAILAND}}, institution = {International Institute for Sustainable Development}, year = {2013}, month = apr, url = {https://www.iisd.org/gsi/sites/default/files/ffs_thailand_czguide.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }