The burdensome subsidy on liquefied petroleum gas (LPG) is expected to be switched to national oil and gas conglomerate PTT Plc from the state Oil Fund, says an Energy Ministry source.
PTT has a direct role in producing and distributing the gas to consumers, he said yesterday.
The source said PTT also has more flexible regulations and operating arms to transfer money and LPG from its gas separation plants, oil refineries, direct importers, wholesalers and retailers.
The Oil Fund would play another role of securing buffer oil stocks and funds to help relieve the impact from volatile oil prices.
"There would be no more cross-subsidy to raise funds from motorists to subsidise gas users because it is unfair," the source said.
PTT will spend about 500 million baht a year if it takes over the subsidy.
Since the launch of subsidised LPG for low-income groups two years ago, only 400,000 households and shops have applied for the scheme. Most were street food vendors.
Data from state utilities show that 7.5 million households are described as low-income groups.
The price of LPG for this group is pegged at 18.13 baht per kilogramme or about 33% below the floating price of 24.16 baht.
Low-income groups in the household sector that use fewer than 90 kilowatt hours of electricity per month and food vendors whose shops are not bigger than 20 square metres are allowed to buy LPG at a subsidised price.
The LPG price is set to move freely from next Monday. The government will announce median prices calculated with a fairer formula every month.
The LPG price is currently based on the market price of US$488 per tonne, well above the subsidised price of $333.
Maybank Kim Eng estimates floating of the LPG price will help PTT gain net profit of 7.2 billion baht this year, rising to 7.84 billion next year.