BANGKOK (Reuters) - Thailand's cabinet on Tuesday agreed to cut the excise tax on diesel by 3 baht ($0.0928) per litre for three months, from 5.99 baht currently, to help mitigate the impact of high energy prices.
The tax cut will reduce revenue by 17 billion baht ($526 million), but that should be partially offset by a rise in other tax revenue as the economy is recovering, Finance Minister Arkhom Termpittayapaisith told a news conference.
"The tax is necessary as the government has extended the cap of diesel prices at 30 baht per litre until the end of May," he said.
But the country's oil fund, which stabilises domestic prices, is still unable to borrow 30 billion baht as earlier approved by the cabinet, Arkhom said.
The tax cut will give the energy ministry flexibility in keeping retail fuel prices not exceeding 30 baht per litre, said deputy finance minister Santi Promphat.
($1 = 32.33 baht)