Authorities will then consider whether the Ft rate could be cut, he said.

At present, electricity users are billed 78.42 satang per unit as this period's Ft on top of the base power rate.

Piyasvasti was presiding over the signing ceremony between PTT and the Electricity Generating Authority of Thailand (Egat) for their second agreement on additional sales of natural gas to Egat.

PTT president Prasert Bunsumpun said the purchase contract involved the supply of natural gas to Egat's Bang Pakong and Phra Nakhon Tai co-generation power plants. Under the contract, PTT will increase the supply of natural gas to 960 million cubic feet per day.

Without any amendment, the volume of natural gas would be 850-910mcfd until the end of 2008. The volume at the end of 2014 and 2015 would be 650mcfd and 540mcfd, respectively. "To accommodate the demand, PTT has tapped several natural-gas sources locally and abroad, including Burma and the Thai-Malaysian Joint-Development Area. We will also import liquefied natural gas in 2011. We're confident we can satisfy domestic demand, which should grow from 3,000mcfd now to 8,000 in the next 15 years," Prasert said.

Egat governor Kraisri Karnasutra said that under the contract, Egat would need to spend more than Bt100 billion for the natural-gas supply throughout the contract period. With a greater supply of natural gas, Egat could reduce the use of more expensive bunker oil in generating power and save Bt40 billion in fuel costs throughout the period. He based the estimate on the bunker oil price at Bt11 per litre and the natural gas price at Bt204.9 per million British thermal units.

He agreed with Piyasvasti that the Ft should not be increased, because BLCP Power's power plant had started operating, and Egat's Nam Phong power plant in Khon Kaen province was using more natural gas from Udon Thani's Phu Hom Field to produce power.

Prasert said PTT's oil-refining margin would remain at US$6 to $7 (Bt213 to Bt249) per barrel until the end of 2010.

"Though there are additional refineries in many countries, from our queries to Middle East investors, the refineries should be completed in 2010-11, while oil demand should grow annually," he said.

An Energy Ministry source said local oil retailers had been enjoying a hefty marketing margin on diesel sales, at Bt1.80 a litre. The appropriate level is Bt1.20 per litre. "Without any adjustment, oil companies should reap a Bt54-million profit from diesel during the three-day holiday period."

Since September, the daily average diesel-marketing margin has remained high: Bt2.30 a litre in September, Bt1.50 in October and Bt1.54 last month.

Energy Reporters

The Nation