Thailand will stop importing liquefied petroleum gas (LPG) in the second half this year because of a large drop in domestic consumption as a result of the pandemic, says the Department of Energy Business (DOEB).
The situation is similar to 2016 when oil prices tumbled below US$40 a barrel and demand in the transport sector declined.
This year lower demand for LPG was seen across all sectors because of lockdown measures against the pandemic.
DOEB chief Nanthika Thangsupanich said Siam Gas and Petrochemical (SGP) already suspended its LPG imports in June, leaving PTT as the only importer in July, with its last shipment of 9,000 tonnes supplied to the domestic market.
Unique Gas and Petrochemicals will continue to import only to export the gas to neighbouring countries. Shipments are set at 3,000 tonnes a month.
DOEB said LPG supply in the Thai market from January to May this year was 465,000 tonnes a month.
Up to 98% of this volume was produced domestically by PTT and other oil refineries, with 2% being imported.
LPG imports began to weaken in April when importers informed DOEB they started reducing LPG shipments at the end of last year and would rely more on domestic sources.
In April, the volume of LPG imports was only 9,000 tonnes a month, an 87.5% fall from 72,000 tonnes in the same period last year.
Import value also dropped 89% to 125 million baht, compared with 1.14 billion in the same month last year.
This year DOEB estimated daily demand for LPG would decrease by 6.4% to 5.4 tonnes among households using it as cooking gas, 30% to two tonnes for transport, notably for taxis, 10% to 1.6 tonnes for industries, and 19% to six tonnes in petrochemical businesses.
Despite the drop, total demand for LPG in 2020 will not differ much from last year -- 15 tonnes per day -- because the department expects more usage in the second half of this year.
Usually demand for LPG grows 6-7% annually.
Ms Nanthika said LPG usage has been booming since 2004 when oil prices frequently fluctuated.
People, especially those in the transport sector, shifted their fuel to LPG, which was less expensive, she said.
Prices were then capped just slightly above $315 a tonne, which was lower than the global prices of more than $400 a tonne, as the government needed to keep cooking gas prices low.
WP Energy, Thailand's third largest LPG trader, believes LPG trade should return to normal later this year after the government eased its lockdown measures.
WP deputy chief executive Noppavong Omathikul expects the company's total sales this year will decline by 5% from 770,000 tonnes last year.
The company expects market share to rise by one percentage point to 18%, behind PTT and SGP.
Mr Noppavong said WP is monitoring the domestic LPG market to plan for future imports as it may ship in the gas for export or supply LPG domestically if LPG production facilities shut down.