Private sector favours delay in LPG price increase

 He said the increase would raise the cost of living, at the time when the public is suffering from economic contraction. He noted that the government should thoroughly review the actual cost of LPG, before raising the price of the gas for industrial use. The increase would raise manufacturers' operating cost, he noted.

  Prime Minister Abhisit Vejjajiva yesterday assigned the Energy Ministry to consider if it should proceed with the planned two-tier pricing scheme for liquefied petroleum gas (LPG), now that the global price has fallen near the domestic level.

 "There is no reason to adjust the price of LPG for transportation and industrial use. In the next National Energy Policy Council's meeting next week, which I will chair, we should have the conclusion on energy policies," Abhisit said after the meeting with Energy Minister Wannarat Charn-nukul yesterday.

 Pramon Sutivong, chairman of Thai Chamber of Commerce, noted that domestic LPG price should be adjusted in line with global prices as subsidies would distort the market mechanism. Yet, the public should be informed in advance.

He was against the plan to split LPG prices into two tiers, as this would lead to smuggling and other problems. Meanwhile, the government is urged to review the energy policy: at the time when oil prices are low, it should go ahead with renewably energy development. The clear policy would give confidence to business operators that the policy would stay.

The previous government approved the two-tier pricing scheme. While household gas price would be maintained, the price for transportation and industrial gas would be raised Bt6 per kg.  Former Energy Minister Piyasvasti Amranand was against the plan, but urged the government to float the LPG price. In January, LPG has slid to US$350 per tonne, against the $950 peak.

Meanwhile, both the prime minister and the energy minister agreed that natural gas for vehicle price should be maintained at Bt8.50 per kg. Earlier, PTT wanted to raise the price to no more than Bt12 per kg, or half of diesel price.

Wannarat admitted that this may affect PTT's investment plan, but the ministry will seek an internal discussion with PTT on this.

"The prime minister has also assigned the ministry to study on how to adjust the electricity bills and oil excise taxes, which are part of the 6 supporting measures which would be expired end-January," Wannarat told reporters.

The ministry has been urged to stop the cut in oil excise taxes given the recent plunge in global oil prices. However, many favoured the ideas to continue subsidising electricity fees to low-income earners.

Santi encouraged the government to extend the 6 measures, but details may be altered. He noted that though oil prices have declined, but the measures should stay at least six months due to the poor economic conditions.