More use petrol as LPG demand slumps

More use petrol as LPG demand slumps

A petrol attendant filling car with fuel at a PTT station on Vibhavadi Rangsit road. Low oil prices this year has increased petrol consumption this year. PATTARAPONG CHATPATTARASILL
A petrol attendant filling car with fuel at a PTT station on Vibhavadi Rangsit road. Low oil prices this year has increased petrol consumption this year. PATTARAPONG CHATPATTARASILL

Relatively low oil prices have continued to encourage motorists and logistics businesses to switch to petrol, pushing its consumption, along with diesel, to rise in the first 11 months of this year, according to the Energy Ministry.

Petrol consumption rose 10.2% from the same period last year to 28.8 million litres per day largely due to retail prices that fell by 3-4 baht a litre compared with last year, encouraging motorists to switch from the mass transit system to their own cars.

Cheaper prices also pushed diesel consumption up by 3.59% to 60.2 million litres per day. The rise in diesel demand was also due to the increased number of diesel-engine cars on the road, rising by 4.1% from the same period last year.

In contrast, consumption of liquefied petroleum gas (LPG) fell by 9% from the same period of last year to 16.4 million kilogrammes a day, largely due to falling demand in transport and petrochemicals.

The retail price of LPG was capped at 18.1 baht per kg for more than two decades through government subsidies during the global gas price surge, which encouraged motorists to use it for transport.

Demand has collapsed over the past few years as the government began floating the retail price.

The price was completely floated in February 2015, causing the LPG retail price to rise 33% to 24.2 baht per kg and had cut demand on the gas sharply since then.

The petrochemicals sector has switched from using propane, an LPG by-product, as their feedstock to naphtha, a petroleum by-product that has become much cheaper in line with collapsing oil prices.

LPG demand in the petrochemicals sector dropped 15.6% from the same period last year to 4.92 million kg a day, while demand from transportation sector dropped 15.4% to 4.03 million kg per day.

The policy to start floating the price of LPG, which was initiated when global oil prices collapsed in 2014, has brought the retail price of LPG higher than oil, further encouraging motorists to return to oil.

Falling demand in LPG also cut LPG import by 61.8% in the first 11 months of this year to 39 million kg a month.

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