PTT Plc, the Thai majority state-owned oil-and-gas conglomerate, expects liquefied petroleum gas imports to rise five-fold next year to one million tonnes from 200,000 tonnes this year unless the government scraps its subsidy.
The domestic LPG price today, at 8.50 baht a kilogram, is one-third the international market price, with PTT absorbing the difference. Prasert Bunsumpun, PTT's chief executive and president, said the artificially low LPG price at a time when the prices of other fuels were surging in keeping with the sky-high global oil prices had led more motorists to modify their engines to use the gas. Vendors and producers of LPG fitting equipment also are enjoying bonanza profits thanks to its popularity. Mr Prasert said the government's decision to drop the subsidy by gradually floating the cooking-gas retail price could not deter the prevalent use of the gas in the auto sector. An industrial source said that LPG in the global market, at US$902 per tonne in June, could translate into a local retail price of 48 baht a kilogram, excluding seven baht of taxes and other contributions. This compares favourably with 30 baht a litre for premium petrol, excluding 12 baht of taxes and contributions. Although natural gas (CNG) in the transport sector is sold at only at 8.50 baht a kg compared to 18.13 baht per kg of LPG, CNG conversion kits cost three or four times more than those for LPG. ''At present, the gap between the price of LPG and those of other types of fuels is too large. Even if the state floated the LPG price now, it can't let it rise to the real cost all at once because people will be shocked,'' Mr Prasert said. PTT has expanded its natural gas service facilities and expects the gas consumption will rise to 5,400 tonnes a day soon from 1,700 tonnes currently.
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