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Government subsidy scheme criticized

The President of the Bangchak cited the need to resort to other energy resources given that once the ASEAN Economic Community has begun, Thailand will have more natural resources from other nations, which could eventually force the prices of bio-fuel in the Kingdom to drop.

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Gas station Bangkok

Dr. Anusorn Sangnimnuan, President of the Bangchak Petroleum Public Co., Ltd said the political campaigns of most political parties are not clear on energy policy while he wished to see them promoting inexhaustible energy such as solar and ethanol as well as bio-diesel.

He claimed that the present fuel price subsidy only further increases financial burden on the government.

Thailand’s subsidy on diesel currently costs the government THB9.52 billion or USD313.7 million) per month to keep the retail price of diesel below the threshold of THB30 per litre.

The President of the Bangchak cited the need to resort to other energy resources given that once the ASEAN Economic Community has begun, Thailand will have more natural resources from other nations, which could eventually force the prices of bio-fuel in the Kingdom to drop. He urged the government to terminate the subsidy scheme and allow the market mechanism to determine the prices.

Meanwhile, he said Bangchak has no problems of service delays and shortages of NGV at the moment. As Bangchak has only 17 NGV stations across Thailand, he admitted that there are long lines waiting to fill up their tanks. The company is not thinking about expanding more stations due to the subsidy scheme which is not worth the investment.

via Bangchak urged the gov to drop subsidy scheme : National News Bureau of Thailand.

Thailand’s subsidy on diesel currently costs the government THB9.52 billion  or USD313.7 million) per month to keep the retail price of diesel below the threshold of THB30 per litre.

If oil prices  continue its rising trend due to Middle East unrest, Thailand won’t be able to maintain its diesel subsidy more  than two months before the oil fund runs dry.

The Thai government retains authority to control prices or set de facto price ceilings for 38 goods and 1service, including staple agricultural products (sugar, cooking oil, condensed milk, wheat flour, andothers), liquefied petroleum gas, medicines, sound recordings, and student uniforms.

Under the 1999“Act Relating to Price of Merchandise and Service,” a government committee headed by the Minister ofCommerce has the authority to “Prescribe the purchase price or distribution price of merchandise orservice…”, “prescribe maximum profit per unit…”, and set the terms and conditions, including maximumpermissible volumes, of any goods and service in Thailand. The law was amended in 1999 with theadvent of a competition law and was meant to be phased out.

However, with several critical aspects ofcompetition law still undefined, the old law continues in place with no termination under consideration.
Price control review mechanisms are nontransparent. Only sugar currently is subject to a retail priceceiling. In practice, the government also uses its control of major suppliers of products and servicesunder state monopoly, such as the petroleum, aviation, and telecommunications sectors, to influenceprices in the local market.

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Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)

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Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)

What measures has SET taken to support listed companies’ compliance with ESG standards?
PAKORN PEETATHAWATCHAI:

PAKORN: When we first began promoting ESG-compliant investments, we were met with little interest. We attributed this to a lack of clear data to showcase the economic benefits of ESG investment, and perhaps limited clarity as to what constitutes a sustainable or ESG-compliant investment. The launch of the THSI list and, subsequently, the SETTHSI Index, was designed to address this. Our most recent data, comparing returns for the SETTHSI Index with the broader SET and SET100 indices from April 2020 to April 2021, underscores the economic benefits of these investments: the group compliant with ESG standards outperformed the other two indices on every data point. 

As of May 2021 Thailand was home to CG and ESG assets under management totalling BT54.8bn ($1.7bn) across 50 funds – up from 23 funds in 2019. Meanwhile, of the BT187.1bn ($5.9bn) raised in green, social and sustainability bonds since 2018, BT136.4bn ($4.3bn) was raised in 2020 – 83% from the government and the remainder from development banks and private players. This rising demand, in a move to manage risk and generate returns, has been complemented by growing supply and promotion: supply from ESG-compliant businesses aiming for resiliency and sustainable growth, as well as promotion from regulators highlighting investment opportunities with good CG and SD practices. Indeed, the pandemic has been a catalyst in shifting the view of ESG compliance from a luxury to a requirement in the new normal.

In what ways can enhanced standard-setting and regulatory mechanisms overcome the remaining barriers to improved ESG performance?

PAKORN: A multi-stakeholder approach is crucial for enhanced ESG performance – not only in Thailand, but around much of the globe. This can also help to address the standout incumbent challenge: access to reliable, wide-ranging ESG data. For example, the 2020 update to the 56-1 One Report established clear ESG standards and triggered online and offline capacity-building programmes to support listed firms’ compliance. SET is developing an ESG data platform with a structured template to promote the availability of comparable data, maximise value added from corporate sustainability disclosures, and foster collaboration between the business value chain and stakeholders. This is expected to support Thai companies along their ESG journey in an economically sustainable way, result in a greater number of sustainability-focused products and services, drive sustainable investing in the Thai investment community and ultimately “make the capital market work for everyone”, as outlined in the SET’s vision.
 

 

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Economics

Youth unemployment hits new highs in Thailand due to COVID-19 restrictions

BANGKOK, Thailand (ILO news) – Joblessness among young men and women in Thailand has reached a level unseen in recent years due to the impact of the COVID-19 pandemic, according to a new brief from the International Labour Organization (ILO).

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Coronavirus disease 2019 (COVID-19) WHO Thailand Situation Report - 22 February 2021

The Thailand labour market update  found that youth employment fell by 7 per cent in the first quarter of 2021 (from the fourth quarter 2019). The youth unemployment rate increased by 3 percentage points for both men and women, reaching a high of 6 per cent and 8 per cent, respectively.

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