LPG, NGV price hikes delayed

The council, chaired by Prime Minster Abhisit Vejjajiva, decided to maintain the LPG price at Bt18.13 a kilogram, or Bt11.30 a litre.

The NGV price will also be maintained at Bt8.50 a kilogram.

Energy Minister Wannarat Charnnukul said the prime minister was concerned about higher prices affecting people already feeling the pinch from the economic slowdown.

He admitted this would affect payments to PTT, which has shouldered a burden of about Bt8 billion since LPG imports for domestic consumption started last April.

"The Energy Ministry originally expected to pay off the debt by this May. However, indefinite delaying a price hike will in turn delay payments. I don't know when the debt can be resolved. It depends on the situation," Wannarat said.

The ministry planned to hike the price of LPG used for transportation by Bt2.70 a kilogram, in order to pay off the debt and discourage motorists from shifting to the cheap gas. Due to huge demand among vehicle-owners, there was a shortage of LPG last year, prompting PTT to import the gas for the first time in a decade.

The national energy firm is also expected to import another 33,000 tonnes of LPG a month. The Oil Fund now stands at about Bt10 billion.

The NPEC yesterday also instructed the Oil Fund to intervene in the market, because consumers will see fuel prices spike on February 1, when the excise tax will be raised to the normal level. From that day, the contribution from oil sales will be cut, raising fuel prices by only Bt1 a litre. Petrol products are expected to rise by Bt3.30 a litre and diesel Bt2.30, because their excise tax waiver will end. Fuel prices will be adjusted gradually upwards, three or four times over two months, said Wannarat, adding that he expected the fund to spend about Bt3 billion.

The NPEC also approved a revision of its 15-year power-development plan (2008-21), in line with this year's economic-growth rate being lowered from 4.5 per cent to 2 per cent. Under the revision, generation activity by the Electricity Generating Authority of Thailand and independent power producers would be delayed, while the state would buy more power from small power producers, which are expected to invest about Bt104 billion between now and 2013.

Combined domestic investment has also been revised to Bt1.65 trillion, down Bt459.6 billion from the original plan.