The Energy Ministry has announced plans to float the price of liquefied petroleum gas (LPG) in the household and transport sectors early next year.
However, low-income earners and street vendors will still be entitled to a price discount of one baht a kilogramme.
Energy minister Pongsak Raktapongpaisal yesterday said low-income households and street vendors will have to register with the relevant agencies to receive a discount coupon or credit card.
Once registered, they will be able to buy LPG at nearly the current price of 18.13 to 20 baht per kg.
Some 3.67 million low-income households consume less than 50 kilowatt-hours of electricity a month _ the threshold for low-income classification _ while 400,000 street vendors nationwide would also benefit.
The plan was approved by Prime Minister Yingluck Shinawatra early this week.
The LPG price has been subsidised for the household and transport sectors for years, with more than 4 million low-income households directly benefiting.
Locally, LPG has been capped at US$333 a tonne or 18.13 baht per kg.
This compares with the global price of $900 a tonne or 36.35 baht per kg and an ex-refinery price of $550 a tonne or 24.82 baht per kg.
"Registration will be finished in February, after which the LPG price in the transport and household sectors will be gradually floated," said Mr Pongsak.
The state Oil Fund has subsidised the LPG price since 2008 at a cost of more than 100 billion baht.Low-income earners consume six kg of LPG a month on average and street vendors 150 kg.
A subsidy of one baht per kg means the Oil Fund would shoulder 7 billion baht next year, based LPG on the global market price of $900 a tonne, he said.
The capped price led to locally produced LPG to be smuggled into neighbouring countries, where the price is triple Thailand's.
LPG goes for 38 baht per kg in Cambodia and 45 baht in Laos.
The price was floated for industrial users last year, but the household and transport sectors account for nearly 60% of local LPG consumption.
"It's not fair for motorists to pay the levy to subsidise LPG prices, especially for smuggled gas," said Mr Pongsak.
Thailand's LPG consumption is expected to grow by 10% this year to 601,000 tonnes a month from 545,000 tonnes last year. About 24% of LPG is imported, while gas separation plants supply 50% and oil refineries the rest.
About the author
- Writer: Yuthana Praiwan
Position: Business Reporter