Price will not rise today, says ministry

The Energy Ministry will not raise the price of liquefied natural gas (LPG) today, pending a study into the present shortage of the fuel, Energy Minister Poonpirom Liptapanlop said yesterday.

And amid complaints that service stations are hoarding LPG supplies ahead of the expected price hike, the Commerce Ministry yesterday insisted inspections of 53 of 449 LPG stations nationwide found no signs of hoarding.

"The ministry found no instances of hoarding," said Internal Trade Department director-general Yangyong Phuangrach. "The shortage is a result of shipment problems, and the gas-station operators have insisted there is no reason to hoard, because there is no definite time frame for a price increase."

Energy permanent secretary Pornchai Rujiprapha said his ministry had also asked LPG traders to release their combined reserves of 1,000 tonnes before shipments could be normalised over the next few days.

To solve shortages, the Internal Trade Department yesterday met with LPG station operators PTT, World Gas, Siam Gas, Picnic and Unique Gas. Non-PTT operators said PTT - as the sole importer - should allocate higher supplies to them, because they served a higher number of motorists.

Pornchai flatly turned down the request for more supplies, saying the Energy Ministry had no policy of promoting LPG use in vehicles that and it had informed the public if subsidies were completely withdrawn, LPG could be Bt40 a kilogram.

"The sharp rise in demand is the real reason for the shortage. Word of mouth has also prompted motorists to fill their tanks. This led to several stations running out," Pornchai said.

The Energy Ministry showed that during the first five months of the year, 600,000 vehicles were fitted with LPG engines. This brought the total of LPG-fuelled vehicles to 1.2 million. Demand thus rose from 47,000 tonnes a month last year to 52,000-55,000 tonnes in March.

Total LPG demand thus rose to 360,000-380,000 tonnes a month, against a production capacity of 300,000-330,000tonnes. Exacerbating the situation was PTT Aromatics and Refining's shutdown last month of its facility for annual maintenance, cutting supply by 10,000 tonnes a month. Also, imported LPG could not reach Bangkok stations last Saturday, due to docking problems for ships transporting it from Chon Buri.

Due to subsidies, local refineries are using LPG in their operations rather than selling it cheaply, at about US$300 (Bt10,000) per tonne against the world price of nearly $900 per tonne. Rising oil prices has also sparked higher demand for LPG from motorists.