Thailand: Full float of LPG prices mulled

Thailand: Full float of LPG prices mulled

Policymakers are preparing to fully float the prices of liquefied petroleum
gas (LPG) for the household and transport sectors after global propane Saudi
Aramco's price fell to US$345 per tonne.

A Ministry of Energy source who asked to be unnamed said the Energy Policy
Administration Committee are studying the possible effects on the market
before deciding tomorrow to float the prices of LPG.

LPG prices have been partially capped since December 2014 through state oil
fund subsidies. The subsidy currently stands at 1.6 baht per kilogramme.

The government lowered the subsidy in 2014, creating a more open market for
importers.

In 2016, Energy Ministry let the LPG import market float freely, but
retained lower subsidies for domestic market.

Conflicts on the Strait of Hormuz, and overly bullish expectations on North
American shale oil and gas depressed propane prices during the first five
months of the year. A $345 price tag indicates that its time to float
freely, the source said.

Thailand's LPG market capped wholesale prices below $400 per tonne (under 20
baht per kg) for a few decades, and then partially floated to $425 or 22
baht per kg.

The capping price policy was implemented when global oil prices jumped to
over $100 per barrel. LPG was reportedly smuggled and illegally exported
into neighbouring countries. Energy experts estimate the combined value of
smuggling was above 100 billion baht per year.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1280527/full-float-of-lpg-prices-mu
lled

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com