BANGKOK, 27 April 2011 – The National Energy Policy Committee (NEPC) has endorsed a gradual price increase of liquefied petroleum gas (LPG) for industrial use, starting from July, while prices of LPG for other sectors and natural gas for vehicle (NGV) will be pegged until September.
After attending the NEPC meeting chaired by Prime Minister Abhisit Vejjajiva, Energy Minister MD Wannarat Channukul announced that a green light had been given to the price floatation of LPG for industrial purpose in order to correspond to the actual production cost. The increase will become effective from July onwards and will be performed four times in one year, or once every quarter, at the rate of 3 THB per kilogram each time. In the end, the price will have risen by 12 THB per kilogram, which is equivalent to the current subsidy.
However, the committee decided to further extend the price retention measure for LPG for household and transport purposes as well as NGV until September from the original expiration date in June. The NGV price is currently pinned at 8.50 THB per kilogram and is subsidized by the Oil Fund at the rate of 2 THB per kilogram.
The NEPC also agreed in principle to allow the Energy Fund Administration Institute (EFAI) to seek loans of not exceeding 20 billion THB in order to add liquidity to the Oil Fund, which has been depleted. The total cash reserve within the fund now stands at slightly over 3 billion THB and still needs to be spent on the subsidization of diesel price.
In addition, the committee resolved to adjourn the project to construct Thailand’s first nuclear power plant for three years from the year 2020 to 2023. The postponement is mainly due to safety concerns following the recent explosions of nuclear reactors and radiation leakage in Japan.