LPG float for households remains on schedule for September

LPG float for households remains on schedule for September

The Energy Ministry confirmed the price of liquefied petroleum gas (LPG) will be floated for the households in September.

                  A man loads a cylinder of cooking gas in Bangkok in February 2013.

It believes cooked-food prices will increase by only 1% as the LPG price rises by 50 satang a kilogramme in each of 12 consecutive months.

Energy Minister Pongsak Raktapongpaisal said the preparations are nearly finished for direct subsidies to be provided to low-income households and small food vendors so the programme can begin on Sept 1.

Under the scheme, the price of cooking gas will increase by 37% or 6.69 baht per kg to 24.82 baht by August 2014 from 18.13 baht now.

A total of 7.78 million low-income households, defined as those using no more than 90 kilowatt-hours of electricity per month, and food vendors will be subsidised so they can continue to buy LPG at the present 18.13-baht price.

These groups must register with their local administrations or the ministry from Aug 5-30 to receive a PIN code. When buying LPG, they will have to send the code via SMS to a call centre.

The subsidy will be funded by the state Oil Fund.

"Our research found that floating the LPG price by 37% will result in a 1% increase in the cost of cooked food but no extra cost for street food since the vendors will receive a direct subsidy," said Mr Pongsak.

Low-income homes will receive a capped LPG price at a maximum volume of 18 kg per quarter, while street vendors will be limited to 150 kg per month.

With the Oil Fund subsidy, the LPG price has been capped for more than two decades even though the global price has increased to US$333 a tonne from $316 in 2006. Between March 2008 and last month, the subsidy cost the government 141 billion baht.

As well, LPG in the transport sector, which has been capped at 21.38 baht per kg, will rise incrementally by 50 satang a month starting next February until reaching 24.82 baht.

Suthep Liumsirijarern, director-general of the Energy Policy and Planning Office, said energy policymakers will conduct a trial for LPG purchases under the new system among street vendors, low-income households, LPG traders and the call centre. The LPG price float will cut the Oil Fund's monthly financial burden by 50 million baht, he said.

Some 36,000 LPG shops nationwide are being trained to provide consumer and registration information.

Thailand consumes 20.7 million tonnes of LPG a day, with households accounting for 34.3% of the total.

The call centre can be reached at 02-140-7000 and 02-129-3344, or visit www.lpg4u.net, which is being built.

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