The Energy Policy and Planning Office is looking into hiking the price on liquefied petroleum gas for indus¬trial plants, with the funds raised to be used to subsidise LPG imports, which are now shouldered entirely by the Oil Fund.
The agency would find out if it is possible to increase the price for industrial consumption, while retaining or incrementally increasing the price for consumer use.
"Our theory is how we can avoid troubling household users. Gas prices for household use may be maintained. Special levies on industrial and petrochemical plants would then substitute for the Oil Fund's subsidies which are running at about Bt1 billion per month, based on monthly imports of about 100,000 tonnes," Energy Minister Wannarat Charnnukul said yesterday.
The study will take into account information from energy expert Plaiphol Khumsap. He recommended lifting the LPG price for all purposes while subsidising lowincome households, which number about 10 million.
The government recently decided to keep the LPG price unchanged until February for all users.
Users of LPG, or cooking gas, can be divided into four categories - household, transportation, indus¬trial and petrochemical.
Since the LPG price is kept much cheaper than fuel oil, transport and industrial consumption has surged. It also encourages smuggling, as neighbouring countries keep their prices in line with global prices.
The exrefinery LPG price is fixed at US$333 per tonne (Bt10,700), while the global price is over $600. The Oil Fund, which collects a levy on fuel oil, is expected to pay over Bt10 billion a year to subsidise the difference.
Plaiphol's study, completed with the Federation of Thai Industries, showed that pricecontrol for LPG has led to widespread distortion in energy consumption patterns and affects petrol and diesel users, refineries and the entire economy. Domestic consumption last year caused imports to soar 71 per cent to 738,000 tonnes. Imports in 2003 were only 1.33 million tonnes.
The imports come at the expense of petrol and diesel users, who finance the import subsidies, which have accumulated to Bt25 billion. From 2004-2009, refineries experienced an opportunity cost of over Bt50 billion, as they could not sell LPG at global prices. Without the price maintenance, onethird of the Bt50 billion would have been counted as tax revenue.