Thailand Considers Excise Tax Cuts for E20/B20 Amid Oil Fuel Fund Deficit; EV Imports Surge

Key summary

On October 27, 2026, Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas announced that the Cabinet would consider cutting excise taxes on E20 petrol and B20 diesel. The proposal aims to support agricultural sectors like sugarcane, cassava, and palm oil while addressing the Oil Fuel Fund's deficit of over 100 billion Baht. However, officials warn that tax reductions may replace existing subsidies rather than directly lowering pump prices, potentially widening the national budget deficit. Concurrently, the People's Solar program, offering 50,000-Baht subsidies to one million households, is set for Cabinet approval. The opposition People's Party has called for a 6 Baht/litre diesel tax cut and a 1 Baht/litre reduction in retailer margins, citing current diesel prices of 43.54 Baht/litre. In other economic developments, Bank of Thailand Governor Vitai Ratanakorn introduced new risk-management rules effective November 1, 2026, requiring enhanced due diligence for cash transactions of 5 million Baht or more to curb illicit flows. Trade data for September 2026 shows passenger car and truck imports rose 129.4% to $475.83 million, driven by a 138.2% spike in electric vehicle (EV) imports totaling $421.01 million, with China supplying 98.7% of these EVs. Analysts attribute this surge to anticipatory buying before a potential Ministry of Finance excise tax hike on completely built-up imported EVs to at least 30% effective January 1, 2027. Meanwhile, September exports reached US$38.4 billion, a 24% year-on-year increase, with full-year 2026 export growth forecast between 15-16%, potentially reaching 19%. For the first nine months of 2026, total exports expanded 19.6% to $304.6 billion against imports of $348.3 billion.