LPG subsidy revived via welfare card

LPG subsidy revived via welfare card

After a few months of government deregulation of liquefied petroleum gas (LPG), energy policymakers have agreed to bring back a partial subsidy for the gas to reduce living costs and keep growth on track, says the Energy Policy and Planning Office (Eppo).

The partial subsidy has been granted specifically for low-income earners via the state welfare card project, Eppo said.

The benchmark Saudi Aramco propane price, which sets the global trend for prices, rose significantly to US$575 per tonne for October delivery, up from $480 in September and $420 in August due to higher demand ahead of winter.

The rise in global gas prices was expected to push the domestic retail gas prices to almost 24 baht per kilogramme. Energy policymakers are keeping the retail gas price at 21.15 baht per kg.

The slight increase from 20.49 baht per kg in August is hoped to maintain local purchasing power level as the economy recovers, Eppo said.

The reinstatement of a subsidy is in line with the Energy Ministry's potential plan to keep cooking gas prices at a fixed rate through a partial subsidy from the state Oil Fund, said Energy Minister Anantaporn Kanjanarat.

The retail price was partially subsidised through the Oil Fund by adding a subsidy rate of 3.57 baht per kg, up from the previous 2.75 baht, to prevent retail gas prices from exceeding 23 baht per kg, Eppo said.

The subsidy will be delivered through the new state welfare cards that offer low-income earners consumer goods at below-market prices.

Gen Anantaporn said low-income earners will each be subsidised 45 baht every quarter to help them afford gas at lower fixed prices.

With the latest subsidy, the state Oil Fund had 38.63 billion baht in cash as of September. Of the total, some 5.86 billion baht will be used to subsidise cooking gas prices.

On the Bongkot and Erawan gas field concession auctions, the Department of Mineral Fuels (DMF) has reported it will finish the terms of reference (ToR) drafting process by the end of October.

DMF director-general Veerasak Pungrasami said the ToR will be done alongside regulations for production-sharing contracts, business models and benefit-sharing between investors and the Thai government.

The Bongkot gas field (B15-B17) is operated by PTT Exploration and Production Plc and is due to expire in 2022-23, while the Erawan gas field (B10-B13) is operated by Chevron Offshore Thailand and is due to expire in 2022.

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