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NEWS UPDATES Asean Affairs           31   August  2011

Thai government to end LPG price cap

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The Thai government is planning to revive a policy to float the liquefied petroleum gas price, which has been fixed for more than two decades, and to issue credit cards to low-income earners to alleviate the impacts of the policy.

The Energy Ministry yesterday instructed the Energy Policy and Planning Office (Eppo) to conduct a feasibility study on the plan as the cooking gas price subsidy is now costing the Oil Fund 3.5 billion baht (US$ 116.4 million) a month.

The LPG price had been capped for more than 20 years until the Surayud Chulanont government decided to allow it to gradually rise from December 2007. However, the policy was reversed during the Samak Sundaravej administration, resulting in the price of the product being capped at 18.13 baht per kilogramme, or 280-290 baht for one 15kg cylinder until now.

The subsidy was originally intended to help households and food vendors, but amid the global oil price rise, cheap LPG has encouraged taxi drivers to modify their engines to use the gas.

The state subsidy for LPG has also resulted in it being smuggled to neighbouring countries.

"We may set the retail price at 30 baht per kg, but the government will issue energy credit cards in order to help low-income earners," said Eppo's director-general Suthep Liumsirijarern. He did not elaborate how the credit cards could be used.

Energy Minister Pichai Naripthaphan said the government is poised to revamp the pricing structure on all energy products in order to prevent price distortion in the longer term. This would include the price of compressed natural gas (CNG), which is currently heavily subsidised by the Oil Fund and the national oil company, PTT Plc.

Meanwhile, the energy ministry yesterday agreed to cut the price of premium ethanol-blended gasohol (95 gasohol) by 1.07 baht per litre, effective today.

The price reduction would be achieved by reducing the levies collected from retailers to the Oil Fund from 2.4 baht to 1.4 baht.

The move will bring down the new gasohol 95 price to 35.37 baht per litre, equal to that of regular 91 gasoline.

The ministry also agreed to use money from the Oil Fund to subsidise the prices of 91 gasohol and E20, a gasoline with 20 percent ethanol, by 1.50 baht per litre.


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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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