Fossil fuel subsidies are a prominent feature of many Asian economies, including Thailand. These
are categorized either as consumer subsidies—benefiting users such as transport and manufacturing industries and electricity generation—and producer subsidies, which lower costs for producers involved in the exploration, extraction, or processing of energy products. Subsidies contribute to fiscal imbalances in many countries and operating losses in utilities, in addition to other unintended negative consequences.
They restrict public expenditure on development priorities such as education, health,
and infrastructure; are inefficient for supporting low-income households; and encourage excessive consumption through low energy prices, increasing air pollution, and greenhouse gas emissions. The need to reform fossil fuel subsidies has increasingly been recognized, with international and national commitments to phase out inefficient subsidies.