LPG, CNG prices begin their ascent

LPG, CNG prices begin their ascent

Decade-long subsidies for cooking gas and natural gas prices end today as the Energy Ministry raises their retail prices closer to the actual cost in accordance with the government's energy reform policy.

Taxis queue up for compressed natural gas. The price of CNG for personal vehicles is set to increase by one baht every six months. PHRAKRIT JUNTAWONG

Areepong Bhoocha-oom, permanent secretary for the Energy Ministry, said yesterday the price of liquefied petroleum gas (LPG) and compressed natural gas (CNG) will be higher for some users starting today.

The Energy Policy Administration Committee (EPAC) chaired by Energy Minister Narongchai Akrasanee approved an increase in LPG prices for the transport sector by 62 satang per kilogramme, as well as one baht per kg for CNG.

The new LPG price for motorists is 22 baht, still lower than in the household sector, which is 22.63 baht a kg. The actual LPG price is 29.33 baht, which only the industrial sector is required to pay.

The new CNG price is 11.55 baht per kg for trucks and passenger cars, set to rise by one baht every six months, but it is still capped at 8.5 baht a kg for public transport such as taxis and public buses.

"Under the reform plan, energy prices rise progressively. The next price increase will be considered by the National Energy Policy Council, chaired by the prime minister, next week," said Mr Areepong.

EPAC also approved a higher levy of 40 satang on Tuesday on diesel for the state Oil Fund, sending its price crashing through the 30-baht barrier for the first time in five years to 30.39 baht a litre. The Oil Fund will gain 3.2 billion baht per month, up from 2.84 billion, as it is expected to return to black in November after losses for several years.

Charcrie Buranakanonda, senior executive vice-president of PTT Plc, the sole seller of CNG, said raising the CNG price by one baht would increase its revenue to 2 billion baht per year for the fuel, but accrued losses surpassed 100 billion this August from a decade of subsidies. Last year PTT's CNG business lost 24 billion baht.

The higher CNG price was the result of negotiations with the Land Transport Federation of Thailand (LTFT), which represents transport operators and agreed to the rise in exchange for PTT building another 200 CNG filling stations across the country, up from 700.

"This business cost us hundreds of billions of baht for investment and operating losses, so PTT delayed our station expansion. But since our largest customer allowed us to raise the price, we agreed it made sense to invest further," said Mr Charcrie. 

PTT and the LTFT signed an agreement to set a ceiling price for CNG at 16 baht. There are 450,000 CNG-enabled units on the road, up from 100,000 in 2009.

In other news, the Renewable Energy Development Committee approved 18 licences under the very small power producer scheme for a total of 53 megawatts.

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