Ministry resolute on LPG float in early 2013

Energy Minister Pongsak Raktapongpaisal yesterday reiterated the government's intention to float energy prices this year, deeming a float of liquefied petroleum gas (LPG) a must.

Pongsak: Stopping smuggling a priority

The government plans to begin the first phase of the floating scheme by March, when LPG's price is set to rise by 33% to 25 baht a kilogramme. So far, LPG has been capped at US$333 a tonne or 18.13 baht per kg.

"We'll not delay the floating price scheme, as LPG is being smuggled from Thailand, where the price is low, to neighbouring countries in huge volume. This is expected to rise sharply in the future," said Mr Pongsak.

The Energy Policy and Planning Office is preparing to register 9 million low-income households and street vendors to receive a direct subsidy from the state-owned Oil Fund after the LPG price is floated.

With the subsidy, these consumers will be able to buy LPG at 18-20 baht per kg. Their usage is estimated at 6 kg per household and 150 kg for each vendor.

The government expects 70,000 kg of LPG to be subsidised after March.

Mr Pongsak said the ministry and energy policymakers will properly inform the public about the need to float LPG prices in order to minimise protests and potential conflict.

More than 1 million copies of leaflets with information about the LPG price structure will be distributed to the public by mid-January.

Since 2008, when global oil prices skyrocketed, LPG has been subsidised in Thailand at a cost of more than 100 billion baht. As domestic consumption has continued its surge, Thailand has changed from an LPG exporter to an importer.

Locally, LPG has gained popularity among motorists with its cheaper price than petrol. Demand for LPG rose from 372,000 tonnes per month in 2008 to 601,000 tonnes per month in 2012.

Last year, the Energy Ministry attempted to float the LPG price but later decided to delay the process.

In related news, Mr Pongsak said the ministry has rejected a request by energy giant PTT Plc to hike the price of compressed natural gas (CNG).

The ministry said PTT should build more stations to satisfy CNG users.

CNG refill stations totalled 485 units last year against a target of 500 sites, said Mr Pongsak.

The gas trades at 10.50 baht per kg, and PTT has been requesting a price hike to 14.50 baht since last year.

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Writer: Yuthana Praiwan
Position: Business Reporter