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Published on December 1, 2007

Energy Policy and Planning Office director-general Viraphol Jirapraditkul said the ministry had changed the ex-refinery price to reduce the burden the government has to contribute to the Oil Fund by Bt279 million per month.

The rise becomes effective today.

The Commerce Ministry yesterday warned food sellers not to take the opportunity to increase prices as the extra cooking cost has been calculated to increase food by only Bt0.04 per dish.

The government had to increase the cooking-gas price because it had spent much money to subsidise the price, prompting users to shift to liquefied petroleum gas (LPG), which is also used as cooking gas. A number of car owners have also modified their engines to make them compatible with LPG.

In 2006, drivers shifting to LPG engines and LPG use rose by 51.6 per cent compared to the previous year. This year, the use of LPG engines rose by another 29.7 per cent. The use of cooking gas meanwhile rose by only 0.5 per cent in 2006 and 6.8 per cent this year.

If the government continued to encourage people to use cooking gas and LPG by continuing to subsidise the price, it may lead to a shortage of cooking gas in the next one or two years, Viraphol said.

Besides, the cooking-gas price is lower than in neighbouring countries and cooking gas has been smuggled outside the country as a result.

Intervention in the cooking-gas price occurs at two levels. First, direct compensation from the Oil Fund as users of petrol and diesel have to bear the contributions to the Oil Fund, part of which subsidises cooking gas.

Secondly, the government set a ceiling on the cooking-gas price at US$320 (Bt10,830) per tonne, compared to the world market price of $740.

The wide margin encouraged local producers to export rather than selling the gas domestically.

The increase will cost each household Bt9 a month if it uses one 15-kg tank of cooking gas every two months.

Energy Reporters

 The Nation