Decision today on oil-price hike

But Yodphot Wongrukmit, executive vice president for retail marketing at Bangchak Petroleum, said if oil prices continued sliding, another increase could be delayed.

"Although the marketing fee remains high today [January 14] - at Bt1.70 per litre for petrol and Bt1.50 for diesel - the average marketing fee so far this month is only 80 satang per litre," he said.

In considering adjustments to retail fuel prices, retailers will base their decisions on global prices over the past three days, he said.

Statistically, the average marketing fee - representing the gross profit of petrol stations - was Bt1.05 a litre in 2005. It dropped to Bt1 last year and below Bt1 in the past few weeks.

Commenting on reports that private bus operators are moving to increase their fares, Yodphot said bus fares would tend to rise and that the only way to solve the problem was to encourage operators to use alternative fuels like gasohol, biodiesel or natural gas for vehicles.

In Singapore, oil prices rose yesterday as traders weighed increasing tensions in the Middle East against predictions that a possible US recession would curb oil demand. Light, sweet crude for February delivery was US$93.15 (Bt3,100) per barrel by mid-afternoon in Asian electronic trading on the New York Mercantile Exchange in Singapore, an increase of 46 cents. The February contract price fell $1.02 to settle at $92.69 a barrel last Friday.

Yesterday's Dubai crude oil price was $87.91 per barrel, down $1.30.

Shell Thailand retail-marketing manager Sanlaya Sukhonthasap said the refined petrol price fell $2.54 a barrel to $100.82 yesterday, and refined diesel ended the day at $106.44. This meant the petrol-marketing fee rose.

"2008 is the year of volatility. Still, we believe oil prices are on an upward trend. It's not possible for oil producers who once enjoyed a price of $100 a barrel to be happy with less. I'll bet that within one or two days, there will be incidents to push up oil prices," he said.

He also said it was very likely that at their next meeting, oil producers would reduce output if prices were sliding.

Sanlaya said to break even, an old large-sized fuel station needed to gain at least Bt1.50 a litre in marketing fees, while new stations needed between Bt1.80 and Bt2 per litre.

The entire retail oil business has suffered from losses for years, with a loss of more than Bt5 billion last year alone, he said.

In this situation, Shell will focus more on sales of gasohol 91 from between 40 and 200 stations by mid-year.

However, it will not rush to make gasohol E20 available, because demand will depend on the number of vehicles compatible with this fuel. Nor does Shell have current plans to market biodiesel B5, due to problems with the availability of palm oil, its raw material. It will join other retailers in selling biodiesel B2 from February 1, he said.

The Nation