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Govt urged to launch measures to reduce oil consumption


May 18, 2008

Govt urged to launch measures to reduce oil consumption

The Thai government should launch immediate measures aimed at reducing oil consumption in the country systematically and to also cushion an impact on the country's economy, according to a report by Kasikorn Research Center.

The current sharp increase in oil prices has already impacted the Thai economy, according to the report.

It is expected that the West Texas Intermediate (WTI) crude oil price will remain high until next year with its price rising as high as US$150 per barrel if concern over oil dwindling supplies persist, the US dollar continues to weaken, and the capital market becomes more volatile, the report said.

WTI crude oil is of very high quality and is excellent for refining a larger portion of gasoline than other crudes.

Speculation on oil prices could lessen if these worries are overcome, the report indicated, adding that the current soaring price of crude oil price has affected Thailand greatly because the country proportionately consumes oil at a higher level than a number of major countries, including the United States, Japan, China and India in relation to the gross domestic product.

If the average WTI crude price this year rises to $110 per barrel, up about 50 percent from 2007, Thailand's economic growth could be affected by approximately 1.8 per cent while inflation could rise about 2.3 percent above the normal rate, it said.

Thailand's sustainable exports growth and an increase in income in the farming sector may help the country's growth this year to grow not less than 4.9 percent while average inflation would advance above 5 per cent from 2.3 percent last year, it added.

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