Retail LPG to remain at same price

PUBLISHED : 31 Aug 2023 at 05:35

NEWSPAPER SECTION: Business

WRITER: Yuthana Praiwan

The retail price of liquefied petroleum gas (LPG) is expected to be maintained at 25.87 baht per kilogramme, or 432 baht per standard 15-kg cylinder, for another month, according to the Oil Fuel Fund Office (Offo).

Wisak Watanasap, director of the Offo, said the fund's board met on Tuesday and passed a resolution to cap the LPG retail price until Sept 30, extending it from the expiration date of Aug 31.

According to Mr Wisak, the actual price should be 30.27 baht per kg or 454 baht per cylinder.

Offo has subsidised the LPG retail price by 4.4 baht per kg since last year, aiming to ease cost of living expenses as the gas is considered vital to economic activities.

He said Saudi Aramco's reference cargo price on Tuesday closed at US$574 per tonne, surging by 23% from $465 per tonne in July.

With the fourth quarter approaching, when LPG is usually expensive because of heightened global demand for heaters, Mr Wisak said the fund is organising a fundraising initiative for 55 billion baht, involving securing loans from financial institutions.

This initiative is likely to be activated if the LPG price surpasses $600 per tonne, he said.

The fund's cash balance, as of Tuesday, is a shortage of 55 billion baht, of which 44.7 billion stems from the LPG subsidies, while an additional 10.3 billion baht comes from the policy of maintaining a price cap for oil, said Mr Wisak.

The diesel price remains at 32 baht per litre, though the global markets just registered a substantial upswing.

The Finance Ministry reinstated a 5.99-baht excise tax on diesel last month after ending the diesel fuel excise tax reduction scheme, initiated to alleviate the cost of living.

In response, Offo chose to maintain the price by subsidising it at an equivalent rate.

The ministry oversees the excise tax, while the state Oil Fuel Fund is under the jurisdiction of Offo.

Mr Wisak said the ministry's decision stems from its intent to maintain excise tax collections from motorists after the tax was cut in February 2022.