Gas subsidies to carry on, Eppo says

  • The Energy Policy and Planning Office (Eppo) insists the State Oil Fund is stable and the government will reduce the burden for consumers of liquefied petroleum gas (LPG), Eppo director-general Twarath Sutabutr said 19 Jul 18. Authorities will also work harder to promote free competition in the domestic market, he added.
  • On 5 Jul 18, the National Energy Policy Council resolved to stabilise the domestic LPG market amid a fluctuating global market. It sought cooperation from state-owned gas and oil company PTT in not exporting any LPG produced at its gas-separation plant unless there is a “serious technical need”.’
  • But records from the first five months of 2018 show that LPG imports averaged 42,120 tonnes per month while exports stood at 22,876 tonnes. Domestic demand is 20,000 tonnes above production capacity. As such, domestic gas separation and oil refinery businesses should reduce their exports and focus more on domestic sales and competition to help improve the situation, officials said.
  • Meanwhile, Epac will change the period of reference for LPG prices from weekly to bi-weekly at the end of Jul 18, Mr Twarath said.
  • Earlier this week, the Eppo website reported the cooking gas account was THB117mn in the red as of 15 Jul 18. This is because it has been subsidising the price at THB6.234 per kilogramme to cap the price at THB13.08 per kg, equal to THB363 per cylinder, excluding transport fees. The account used to have a balance of THB1bn but this has dwindled away due to various policy decisions.
  • Meanwhile, falling domestic oil prices are still lower than the drop seen globally, resulting in a high marketing margin.
  • The Epac decided to cut the subsidy budget and range levies from THB0.5 to THB0.13 for diesel, and from THB3.51 to THB3.10 for biodiesel B20, he said.

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