BANGKOK, THAILAND – A sudden 6‑baht rise in diesel prices sharply drove up Thailand’s transport costs by almost 20%, prompting calls for higher freight rates.
Price hike and its impact
The Thai government raised the diesel price by 6 baht per liter, a move that many citizens and business owners found shocking. The increase immediately pushed up transport costs across the country.
The Thai Transport Federation announced plans for a general meeting of its members to discuss adjusting transport tariffs. According to the federation, the industry could no longer absorb the higher fuel expenses.
Cost structure in the transport sector
Fuel currently accounted for 45–50% of total transport costs. A rise of just 1 baht in the diesel price led to an increase of around 3% in overall transport expenses.
The latest 6‑baht hike therefore pushed transport costs up by an estimated 18–20%. For many companies, this was described as an unbearable financial burden.
Real diesel prices
When subsidies from the national oil fund were taken into account, the real diesel price already stood at more than 66 baht per liter. This underlined the urgency of the situation facing the transport industry.
The Transport Federation called for transparent government support to ease the financial pressure on businesses. It urged policymakers to clarify how assistance would be provided.
Government support measures
The federation backed a proposal for the government to transfer direct financial aid to operators via the PromptPay system. This was seen as a more transparent and traceable mechanism for distributing support.
Such an approach could help affected companies cope more effectively with the rising costs. The sector argued that without targeted assistance, many operators might not withstand the surge in expenses.
Problems with B20 fuel
The promotion of B20 fuel, which was cheaper than B7, was viewed as inadequate as a long‑term solution. Because the blend included palm oil, which was expensive, it was not expected to cut costs sustainably.
In addition, B20 was not suitable for modern Euro 5 vehicles, further limiting its use in the transport sector. This technical constraint reduced the potential of B20 to ease the industry’s cost pressures.