The Energy Policy Administration Committee (Epac) has cut the retail price of liquefied petroleum gas (LPG) by another two baht a kilogramme along with a logistics cost subsidy given to national oil and gas conglomerate PTT Plc to help free up the domestic LPG market.
The price of LPG per standard cooking gas cylinders has subsequently dropped by 30 baht a cylinder starting today.
Epac yesterday approved the monthly recommended LPG price of 20.29 baht per kg in Bangkok and 22.29 baht in the eastern region due to different logistics costs.
The benchmark Saudi Aramco February monthly propane price declined to US$297 a tonne from $363 last month.
The price drops were in line with falling global oil and propane prices.
Twarath Sutabutr, director-general of the the Energy Policy and Planning Office, said retail prices in remote areas had dropped by only one baht or even remained unchanged in some areas, as rising transport costs in remote areas had offset the fall in gas prices.
Epac yesterday also approved terminating a subsidy ranging from 70 satang to two baht per kg given to PTT.
The move will allow other LPG traders and investors to compete in the Thai LPG market on a more equal footing.
"We've come closer to obtaining a completely free float LPG market," said Mr Twarath.
He said most LPG importers and traders had to exit the business over the past seven years when surging oil prices forced the government to lend support to PTT, distorting domestic prices in order to help reduce the adverse impact on LPG consumers and the rising cost of living.
Witoon Kulcharoenwirat, director-general of the Energy Business Department, said many LPG-related businesses and investors had expressed interest in throwing their hat in the ring after the end of the subsidy, which had lasted more than 10 years.
The government also plans to facilitate the sector by investing in logistics facilities and putting an end to PTT's monopoly on the LPG import business.
He said major LPG businesses including PAP Gas and Oil Co, Siam Gas Co and Picnic Gas Co were among those enticed by the changes.
"They are not only interested in the Thai market but also have an eye on trading LPG in neighbouring countries, whose economies are growing quite quickly," Mr Witoon said.
Meanwhile, PTT executive vice-president Noppadol Pinsupa yesterday announced four gas fields would be shut down for annual maintenance.
Three of the gas fields are in Myanmar -- Yadana, Yetakun and Zawtika.
The Yadana shutdown will be from Feb 20-23, with estimated gas supply disruption of 1.1 billion cubic feet per day.
Yetakun will be closed for about nine days in mid-April, with estimated gas supply disruption of 570 million cfpd.
Zawtika's 10-day shutdown next month is expected to cause a disruption of 640 million cfpd.
Another shutdown will be in the Malaysia-Thailand Joint Development Area's block A-18.
It will be closed for about 10 days in the third quarter with an estimated disruption of 420 million cfpd.
Mr Noppadol said the shutdown schedules had been arranged in order to prevent any gas supply shortage during the shutdowns.
The government plans to import liquefied natural gas immediately if there is any urgent need or shortage, he added.
PTT shares closed yesterday on the Stock Exchange of Thailand at 234 baht, up two baht, in heavy trade worth 3.2 billion baht.