Thanong said the Cabinet yesterday approved a Finance Ministry proposal to exempt natural gas vehicle (NGV) engines from the current average tax rate of 10 per cent.

Used NGV engines will also be subject to a two-year tax exemption.

The government has also asked the Small and Medium Enterprises Development Bank of Thailand to provide low-interest loans for taxi drivers to encourage them to modify their vehicles to run on natural gas.

Thanong said the tax exemption should not affect the government's revenue because currently only a small number of NGV engines have been imported.

The tax exemption should also save on fuel consumption and reduce the cost of transportation.

However, the implementation of the exemption will have to wait until it is published in the Royal Gazette, which should take two or three days.

The Cabinet yesterday also considered a set of measures to help business operators affected by the skyrocketing oil prices. The government has asked PTT Plc to make NGV fuel available at 200 stations nationwide by the end of the year.

Thanong said many indicators suggested that economic growth would slow down in the second and third quarters this year, largely because of the sharp rise in oil prices.

He said yesterday's measures should help save energy and that the ministry was also considering putting in place other measures to prevent economic deceleration.

"We are not encouraging people to spend more, but we want to persuade them to have more awareness about energy conservation," he said.

To promote NGV consumption, PTT yesterday said it would offer its sale price of Bt8.50 per kilogram for another two years.

PTT has been encouraging taxi operators to switch from liquefied petroleum gas (LPG), also known as cooking gas, to NGV, with the aim of converting 30,000 LPG cars to NGV by the end of April next year.

Chitrapongse Kwangsukstith, senior executive vice president of PTT, said there were currently about 12,000 vehicles capable of using NGV fuel, 6,200 of which are taxis.

He said PTT was encouraging taxi drivers to adjust their vehicles by providing financial support to the tune of Bt30,000 to Bt40,000 for each car.

He said if the taxi drivers modified their cars they would be able to save about 70 per cent on their energy costs compared to benzene consumption and 30 per cent compared to LPG.

NGV is also safer than LPG, Chitrapongse said.

Watcharapong Thongrung

The Nation