The Energy Ministry is shrugging off calls to stabilise oil prices in spite of a recent price spike as a result of Iranian tensions and Nigerian supply worries.

The ministry said it would attempt to reduce consumption during the historical peak-consumption period.

This month has seen five consumption records set as a result of hot temperatures. The last was on March 27 when demand reached 21,896 megawatts - 4 per cent higher than the same period last year.

The Energy Policy and Planning Office expects demand to peak at 22,567 megawatts during April and May - representing a 7-per-cent increase from the same period last year. Energy Minister Piyasvasti Amranand said oil prices were rising because of geopolitical tensions.

"However, average oil prices this year should stay between US$50 (Bt1,750) and $65 a barrel," he said, adding it was unnecessary for the ministry to prepare emergency measures to accommodate volatility or to stabilise oil prices.

"We cannot say if price stabilisation will be put in place. The situation is unpredictable. We have to monitor it closely," he noted.

Oil prices were up $1 yesterday in Asian trade, easing back after spiking more than $5 a barrel on rumours Iran had fired a missile at a US ship in the Persian Gulf.

Light, sweet crude for May delivery was up $1.01 at $63.94 a barrel in electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore.

Dubai crude rose yesterday to $60.52 per barrel while refined petrol was at $79.04 and diesel at $75.73.

Today, domestic oil retailers - whose average marketing component dropped to 54 satang a litre yesterday - are to increase prices of both petrol and diesel by 40 satang a litre on increases in global prices following a halt in supply from Nigeria. Octane-95 will rise to Bt27.99 a litre, octane-91 to Bt27.19 and diesel to Bt24.14.

Piyasvasti noted price stabilisation was unnecessary now that consumers had access to cheaper fuels - gasohol and biodiesel. Gasohol-95 is selling for Bt25.49 a litre.

He asserted the ministry would campaign for lowered energy consumption - particularly at state buildings which consume 4,500 million units a year, or 4 per cent of national power use. At current prices that costs Bt13.5 billion.

The government will put energy conservation on the national agenda. State agencies will be encouraged to cut use by 10 per cent.

Energy deputy permanent secretary Norkhun Sitthipongse said in completing the 2007 power development plan, the ministry must take into account power blackouts and expanding hot-season demand. A 1-degree-Celsius rise in temperature translates into a 300-megawatt increase in electricity.

Energy Reporters

The Nation