Cooking gas subsidy slated to end in second quarter
Bangkok Post, 10 March 2004
Yuthana Praiwan
The government plans to end the subsidy for cooking gas in the second quarter of this year when the world price of liquefied petroleum gas is expected to fall below US$250 per tonne.
Metta 13anturngsuk, director of the Energy Policy and Planning Office, said the global price of LPG or cooking gas had fallen by $65 to $265 per tonne in the past month.
As a result, the subsidy through the state oil fund had been reduced to 67 satang per kilogramme, or about 139 million baht per month. However, the retail price of cooking gas remained unchanged at 15.81 baht per kilogramme.
Mr. Metta said the decline in LPG prices had been taking place as analysts forecast, and prices were expected to continue falling to below $250 per tonne in the second quarter this year.
"When that happens, the subsidy is no longer needed, in line with the Energy Ministry's policy to liberalise cooking gas prices sometime this year, one year ahead of schedule," he said.
Once cooking gas prices are freed up, Mr. Metta said, they would not only move according to the market, but the change would encourage more efficient and economical use of gas and help reduce the oil fund's debt.
The oil fund currently has capital of 2.59 billion baht. As of March 8, unpaid subsidies for petrol and cooking gas prices stood at 2.76 billion baht, of which 1.23 billion baht was for cooking gas.
The remainder was for petrol during the price-capping exercise that took place between Jan 10 and March 3. The oil fund remains in deficit at 169 million baht.
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