Thailand: LPG subsidies raised for price stability

Thailand: LPG subsidies raised for price stability

The Energy Policy and Planning Office (Eppo) has kept the retail price of
liquefied petroleum gas (LPG) unchanged even though global gas prices are
rising.

The decision was made to prevent consumers from being affected by
fluctuating global gas prices.

Eppo director-general Twarath Sutabutr said the energy policymaker agreed to
increase the subsidy rate from the Oil Fund by 4.70 baht per kilogramme, up
from the previous rate of 28.9 satang per kg, bringing the total subsidy to
4.98 baht per kg.

"The new subsidy rate will be effective from Jan 10," said Mr Twarath,
adding the rising subsidy aimed to help absorb the recent rise in global gas
prices.

Global LPG prices rose by US$69 per tonne to $465 per tonne in January.

The depreciation of the Thai baht against the US dollar also made
dollar-based gas even more expensive, he said.

The raised subsidy is expected to incur around 440 million baht per month in
expenses for the Oil Fund to pay.

As of January 2017, the Oil Fund has total cash in hand of 41.1 billion
baht, Mr Twarath said.

Eppo also reported that Thai liquefied petroleum gas (LNG) consumption will
be at 5 million tonnes in 2017 and is expected to rise to 6.1 million tonnes
in 2018.

The demand was expected to rise to 14.2 million tonnes in 2021 and to over
20 million tonnes in 2025, which has incentivised the energy policymaker to
seek ways to secure gas supply in the long term in order to meet future
demand.

To meet LNG demand in 2017, Eppo has already had national oil and gas
conglomerate PTT Plc secure supply contracts from major gas exporters. These
include 2 million tonnes from Gatagas, 375,000 tonnes from Shell, 317,000
tonnes from BP, 240,000-360,000 tonnes from Petronas and 1.6-1.9 million
tonnes from the spot market.

Mr Twarath said Eppo expects average imported gas prices to be at $7.53 per
million British thermal units.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1177953/lpg-subsidies-raised-for-pr
ice-stability

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com