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Published on September 1, 2007

Club chairman Chainoi Puankosoom said yesterday that the country's LPG exports would stop by the end of this year. The strategy will ensure sufficient supply amid rising local demand.

"Stopping exports will reduce the income of refiners, although it can be offset by higher margins. However, we want the government to consider adjusting the domestic price ceiling," Chainoi said, adding that if the government ignored the request, Thailand would have to import LPG in future.

Refiners will lose income because the export price of LPG is higher than the local price. The government has imposed a price ceiling of US$315 (Bt10,810) per tonne for domestic sales.

Chainoi said refinery companies were monitoring the US sub-prime mortgage crisis closely for possible impact on the global economy and oil consumption.

Before the sub-prime problem, it was forecast that the global demand for oil would grow by 2 per cent. However, consumption grew only 1.7 per cent in the first quarter of this year as a result of the weaker greenback.

Chainoi said the value of Thailand's oil exports in

July dropped significantly, down 52 per cent to Bt7.43

billion from Bt15.69 billion

last year. Likewise, the daily export volume dropped to

14.9 million litres per day

last month from 27.1 million litres per day a year ago.

However, the drop in daily export volume was caused by the shutdown of Thai Oil's refinery for maintenance last month, he said.

Veerapol Jirapraditkul, director-general of the Energy Policy and Planning Office, said domestic demand for LPG was rising, particularly with more car owners turning to the gas as a cheaper alternative to gasoline.

However, the low domestic price of LPG is due to the government's subsidy, which the Energy Ministry is considering withdrawing, he said.

The Nation