Sunday, December 2, 2007

Thailand's gas price rise impacts LPG use in vehicles

SUKHOTHAI - An increase in the ex-refinery price of liquefied petroleum gas (LPG) by Bt1.20 per kilogramme which takes effect today will lower the use of LPG by motorists and simultaneously follow the market mechanism, Energy Minister Piyasvasti Amaranand said Saturday.

Mr. Piyasvasti said the increase in the ex-refinery price for LPG would automatically halt the financial contributions to the State Oil Fund, but would only affect each household by Bt9 per month on buying cooking gas, which he said was not much compared to the burden faced by the Oil Fund as it collected 40 satang per litre from diesel and gasoline consumers every time prices increased in the past.

Halting the LPG subsidy will also lower the use of LPG in cars, which rose 51 per cent in 2006 and another 29 per cent this year. If the rising trend continues, Thailand will have to import LPG at a higher price in the next two years.

Touching on the current falling oil prices in the world market, Mr. Piyasvasti said his ministry would closely monitor prices during the coming next week before deciding whether to lower retail oil prices in the Thai market.

He said one risk factor which continued to be watched was whether the Organization of Petroleum Exporting Countries (OPEC) would honour its pledge to boost output in order to bring prices down.

The 12 members of OPEC are expected to decide next week on increasing oil production. (TNA)

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