Diesel subsidy of 90st/litre planned

Energy Minister Poonpirom Liptapanlop said on Wednesday that the ministry's officials agreed to the proposal.

 The ministry will scrap the 50-satang-per-litre contribution to the mass-transit development. Secondly, the Oil Fund will cut the compulsory contribution from diesel oil sale by 10 satang per litre. Thirdly, the Oil Fund's reserves could be used. Totally, it will cut diesel price by 90 satang.

 "Oil prices are making new highs due to weak dollar and speculation. If the current contribution mechanism remains unchanged, consumers would be hard hit," Poonpirom said. She insisted that the decision would not cause huge burden to the Oil Fund like in the past, as it would involve only with the existing liquidity.

 Viraphol Jirapraditkul, director-general of the National Energy Policy and Planning Office, said that the Oil Fund is receiving about Bt900 million a month in revenue. Under the policy, it would need about Bt400-Bt500 million per month. 

 "Once the National Energy Policy Committee approves the scrap of the contribution for mass transit development, we can immediately do that," Viraphol said.

 Diesel is now Bt29.94 a litre. If raised again, the price would exceed the Bt30 a litre level which should spark psychological impacts as diesel accounts for 60 per cent of total fuel consumption. It could rise further if the Organisation of Petroleum Exporting Countries cuts the output at the meeting later today.

 Prasert Bunsumpun, president of PTT, said on Wednesday that the company would not raise diesel in the near future but the prices of petrol and gasohol could be adjusted accordingly to the costs.

 In the long term, the ministry will also promote the use of natural gas for vehicles, to push the ratio of NGV to total oil consumption to 20 per cent within 2011.

- The Nation