Imports raised to avoid LPG shortage

Thailand will have to import 108,000 tonnes of liquefied petroleum gas (LPG) this month to meet a sharp increase in demand, particularly from vehicles.

Energy permanent secretary Pornchai Rujiprapha, as chairman of a working committee to solve LPG shortages, yesterday said of that amount, the import of 44,000 tonnes was originally slated for this month, while another 20,000 tonnes had been delayed from last month.

"Remarkably, an extra 44,000 tonnes must be imported to prevent shortages," he said. "Consuming LPG is not wrong, but the Energy Ministry wants to send a message to the public that LPG is now heavily subsidised, priced as much as US$600 (Bt20,200) per tonne cheaper than the global price, and this requires the ministry to quote prices in two tiers, the better to reflect reality."

PTT will also dock its large gas vessel at Klong Toei Port and seek cooperation from the State Railway of Thailand to ensure that no further disruptions of gas supplies occur, like the one that led to shortages last week. The ministry earlier said the price of LPG for vehicles would be raised this month, in order to stymie demand. To prevent the shift of household gas to vehicles, the ministry has asked for the assistance of provincial governors, while the Energy Business and Internal Trade departments will help monitor the market.

The Land Transport Department will strengthen rules on LPG installation standards and imports of second-hand equipment.

Pornchai believes the two-tier pricing will bring down gas consumption.

A ministry source said that in the past two weeks, LPG consumption rose 20 per cent from two weeks earlier, because more vehicles had been converted to use the gas following rapid increases in the oil price.

Reportedly, even motorcycles are now running on LPG, while some farmers use home-made gas tanks for their farm trucks.

"One problem is we have no official data on the number of vehicles fuelled by LPG," the source said. "This makes it difficult to estimate the actual demand and monitor safety issues."

He added that related agencies were evaluating the effects of higher gas prices on various sectors, aside from taxis, in order to find ways to help them.

Energy Minister Poonpirom Liptapanlop said in the first half of the year, LPG consumption rose 19.6 per cent year on year. Demand in the transport and industrial sectors rose more than 50 per cent, and she said without an adjustment in prices, Thailand would need to import the gas for years and shoulder high subsidies.

Meanwhile, PTT President and CEO Prasert Bunsumpun agreed with the pricing move, saying LPG demand had spiked quickly, due to the unrealistically low price. He agreed the price for transport and industrial use must be adjusted first, with household prices raised later.

The previous government originally planned to raise the price across the board, which would affect all users.