Thailand & Asia | 22 September 2026
Thailand considers oil-tax cut as energy shock puts pressure on consumers and businesses
Thailand is considering cutting taxes on oil products as the government looks for additional ways to contain the impact of elevated global energy prices on households and businesses. Finance Minister Ekniti Nitithanprapas confirmed Monday that an oil-tax reduction was under consideration, although the government has not yet announced the size or timing of any cut.
Key points
- Finance Minister Ekniti says Thailand is considering an oil-tax cut, with details still to be determined.
- Brent crude remained around US$102.08/barrel on Monday despite a 1.7% decline.
- Thailand is simultaneously preparing a residential rooftop-solar promotion scheme to reduce longer-term energy exposure.
The move comes as crude prices remain above US$100 a barrel amid continuing disruption around Middle Eastern energy infrastructure and the Strait of Hormuz. Brent crude was around US$102.08 a barrel on Monday, although it had fallen 1.7% as Saudi Arabia worked to restore some disrupted export capacity.
Thailand is already using other measures to cushion consumers from the energy shock. The government said domestic diesel at around THB40.69 per litre remained below general market prices in Malaysia and Indonesia, although comparisons are complicated by different subsidy arrangements and fuel-tax structures.
The pressure is particularly significant because Thailand is simultaneously trying to maintain industrial competitiveness. Higher diesel prices feed directly into logistics, agriculture, manufacturing and tourism costs, while more expensive crude and LNG increase the country’s import bill. Any tax reduction would therefore provide near-term relief but also reduce government revenue at a time when Bangkok is seeking fiscal room for economic stimulus and investment.
The latest proposal also reinforces the government’s broader push toward renewable energy. The Interior Ministry is preparing a residential rooftop-solar promotion scheme for consideration by the Finance Ministry, potentially giving households another way to reduce exposure to volatile fossil-fuel prices.
Why it matters: Fuel taxation has become a direct competitiveness issue rather than simply a consumer-policy question. A tax cut could help protect purchasing power and corporate margins in the short term, but Thailand will need to balance that relief against lost fiscal revenue and its longer-term goal of reducing dependence on imported fossil fuels.
Thailand overhauls factory data as electronics, EVs and semiconductors reshape manufacturing
Thailand is overhauling its Manufacturing Production Index (MPI) after economic agencies concluded that the existing statistics no longer adequately represent the country’s rapidly changing industrial structure. The revised index will give greater weight to electronics and incorporate factories producing EVs, semiconductors, batteries and AI-related components that have previously been underrepresented.
The overhaul has become strategically important because Thailand’s official production data have increasingly diverged from its trade figures. Officials observed that export values were rising strongly in recent years while the MPI and capacity-utilisation indicators showed comparatively weak growth. The discrepancy contributed to concerns in the United States that Thailand could be functioning as a transshipment route rather than producing goods domestically.
Thailand has therefore submitted new production data to Washington covering automotive and parts, machinery and rubber products. The targeted survey indicates that these sectors are operating at 75–90% capacity, substantially above the older national figures of below 60%. The new dataset covers major exporters representing an estimated 80–90% of Thai companies selling to the US market, according to Thai officials.
The statistical overhaul will also move the MPI’s base year from 2021 to 2024, with Thailand planning to move toward a chain-volume methodology similar to those used by Malaysia and Singapore. The changes are expected to be completed in September, with the revised data incorporated into economic analysis after the relevant committees approve the methodology.
The issue has direct implications for Thailand’s trade negotiations with the United States. Washington’s Section 301 investigation is examining structural excess capacity among 16 trading partners, while Thailand is seeking to demonstrate that its manufacturing exports reflect genuine domestic production. The quality of the underlying data could therefore influence perceptions of Thailand’s industrial competitiveness and its argument for maintaining the previously discussed 19% tariff framework.
Key points
- Thailand will revise the MPI with greater weight for electronics, semiconductors, EVs, batteries and AI-related components.
- New data show 75–90% capacity utilisation in three sectors under US scrutiny, versus older figures below 60%.
- The MPI base year will move from 2021 to 2024, with a shift toward chain-volume measurement.
Why it matters: Reliable industrial statistics have become part of Thailand’s trade diplomacy. A more accurate MPI could strengthen Bangkok’s case in US negotiations while giving investors and policymakers a much clearer picture of where Thailand’s manufacturing economy is actually growing.
Vietnam enters FTSE Russell emerging-market index as ASEAN competes for global capital
Vietnam’s stock market has formally moved from frontier-market to emerging-market status in the FTSE Russell index system, marking a major milestone in the country’s efforts to attract international institutional investment. FTSE Russell estimates that the upgrade could ultimately bring as much as US$6 billion of additional foreign capital into Vietnamese equities.
The reclassification follows years of reforms aimed at improving market accessibility, trading infrastructure and investor protections. For Vietnam, the upgrade is more than a branding exercise: inclusion in a widely followed emerging-market benchmark can encourage passive funds and active institutional investors to allocate capital to Vietnamese stocks that previously sat outside many global portfolios.
The timing is particularly significant for ASEAN. Vietnam has become one of the region’s strongest destinations for manufacturing investment, benefiting from companies diversifying production away from China and seeking alternative export bases. The country is competing directly with Thailand, Malaysia and Indonesia for electronics, semiconductors, consumer manufacturing and supply-chain investment.
Thailand’s stock market has nonetheless performed strongly this year. A Reuters analysis published Sunday noted that Thai equities had gained around 26% by mid-September, compared with about 22% for Singapore, while Indonesia and the Philippines substantially underperformed. Thailand’s rally has been supported by foreign technology investment, EV activity, tourism and the relative attractiveness of dividend-paying companies.
The Vietnamese upgrade could intensify competition for regional capital even as ASEAN markets increasingly diverge. Investors are becoming more selective within Southeast Asia rather than treating ASEAN as a single macro trade. For Thailand, maintaining investment momentum will depend increasingly on company-level opportunities, infrastructure quality, energy security and access to high-growth technology supply chains.
Key points
- Vietnam officially entered FTSE Russell’s emerging-market index on September 21.
- FTSE Russell estimates the upgrade could attract up to US$6bn of additional investment.
- Thailand’s equities had gained around 26% by mid-September, highlighting strong but increasingly selective ASEAN market performance.
Why it matters: Vietnam’s reclassification strengthens its position as a competitor for global portfolio flows and foreign direct investment. Thailand still has significant advantages, but the comparison reinforces the need to deepen its capital markets and capture more of the electronics, EV and AI-related investment cycle.
