Thailand mulls taking Indonesia’s fuel-hike poison

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Thailand gas stationThailand is considering following the recent path taken by Indonesia to eradicate costly fuel subsidies, a programme that amounted to $8 billion in 2012 in the kingdom, a senior energy official said during a session of the Asian Development Bank’s Asia Clean Energy Forum on June 27.

“Thailand is suffering from subsidies and we are trying to lift them,” declared Dr Poonpat Leesombatpiboon, policy and plan analyst at Thailand’s Energy Policy and Planning Office.

Drawing out an example, Dr Poonpat said that the amount of money spent on subsidies each year could have been funneled toward the construction of high-speed rails, much-publicised projects in Asia to integrate the region.

But perhaps the more relevant and timely example is that of Indonesia, which recently experienced street protests railing against the government’s surprise decision to strip fuel subsidies worth about $20 billion per year.

This street-level uproar emerged despite drawn-out campaigns by the government to “educate” the public about the detrimental effects subsidies have on the economy.

“Indonesia has been publishing newspaper ads to educate about fuel subsidies for years,” Jon Respati, director of the Indonesian renewable energy society, told the audience at the forum.

“There has been fuel subsides in Indonesia for over five decades. The idea that we are rich in oil and that energy is cheap has lingered for just as long. The is the biggest challenge for Indonesia is how to transform this perception,” Respati added.

Yet with an annual per capita income of about $4,000, the removal of subsidies is quickly felt. In Indonesia, where half the population earns below $2 a day, the smaller fluctuation in staple goods can cause chaos to entire livelihoods.

A politically charged issue, especially within the ranks of ASEAN, the removal of fuel subsidies in Indonesia was carefully wedded with an over $2 billion compensation programme targeted at the country’s poorest.

Though no similar programme has been announced yet, Thailand appears to have gotten the gist of it.

“The person [i.e., the government] who provides the subsidy must create a certain condition to refund the subsidy,” Dr Poonpat resolved.

“In Thailand, there are many societal elements to take into concern,” he continued, alluding to the “social discrimination” that could be erupt in the polarised colour war that governs Thai politics.

An agenda to bring Thai’s closer to the true cost of energy seems likely to make its way to the pen of the prime minister. How prepared Thais are is dependent on how much their government tells them – and what.

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Reading Time: 2 minutes

Thailand is considering following the recent path taken by Indonesia to eradicate costly fuel subsidies, a programme that amounted to $8 billion in 2012 in the kingdom, a senior energy official said during a session of the Asian Development Bank’s Asia Clean Energy Forum on June 27.

Reading Time: 2 minutes

Thailand gas stationThailand is considering following the recent path taken by Indonesia to eradicate costly fuel subsidies, a programme that amounted to $8 billion in 2012 in the kingdom, a senior energy official said during a session of the Asian Development Bank’s Asia Clean Energy Forum on June 27.

“Thailand is suffering from subsidies and we are trying to lift them,” declared Dr Poonpat Leesombatpiboon, policy and plan analyst at Thailand’s Energy Policy and Planning Office.

Drawing out an example, Dr Poonpat said that the amount of money spent on subsidies each year could have been funneled toward the construction of high-speed rails, much-publicised projects in Asia to integrate the region.

But perhaps the more relevant and timely example is that of Indonesia, which recently experienced street protests railing against the government’s surprise decision to strip fuel subsidies worth about $20 billion per year.

This street-level uproar emerged despite drawn-out campaigns by the government to “educate” the public about the detrimental effects subsidies have on the economy.

“Indonesia has been publishing newspaper ads to educate about fuel subsidies for years,” Jon Respati, director of the Indonesian renewable energy society, told the audience at the forum.

“There has been fuel subsides in Indonesia for over five decades. The idea that we are rich in oil and that energy is cheap has lingered for just as long. The is the biggest challenge for Indonesia is how to transform this perception,” Respati added.

Yet with an annual per capita income of about $4,000, the removal of subsidies is quickly felt. In Indonesia, where half the population earns below $2 a day, the smaller fluctuation in staple goods can cause chaos to entire livelihoods.

A politically charged issue, especially within the ranks of ASEAN, the removal of fuel subsidies in Indonesia was carefully wedded with an over $2 billion compensation programme targeted at the country’s poorest.

Though no similar programme has been announced yet, Thailand appears to have gotten the gist of it.

“The person [i.e., the government] who provides the subsidy must create a certain condition to refund the subsidy,” Dr Poonpat resolved.

“In Thailand, there are many societal elements to take into concern,” he continued, alluding to the “social discrimination” that could be erupt in the polarised colour war that governs Thai politics.

An agenda to bring Thai’s closer to the true cost of energy seems likely to make its way to the pen of the prime minister. How prepared Thais are is dependent on how much their government tells them – and what.

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