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Float of cooking-gas price 'beneficial'

The Energy Ministry's flotation of cooking-gas prices will lead to higher efficiency in energy consumption and lower illegal exports of gas to neighbouring countries, said the Kasikorn Research Centre (KResearch).

Published on December 6, 2007



In its research, the centre said the flotation would bring more advantages than disadvantages, despite the extra burden on consumers.

"The cooking-gas price has been kept much lower than the price of other fuels. As of last Saturday, it was priced at Bt9.74 a litre, against the 95-octane petrol price of Bt32.85 a litre. Consumers have been familiar with the wide gap and they are using gas in inefficient ways. Though the gas is meant for household use, it is now used by vehicles as well as industrial plants. This situation would not be good for the economy in the long term," the research centre said.

Meanwhile, the low prices have encouraged illegal exports to the neighbouring countries of Vietnam, Laos and Cambodia.

The report said higher cooking-gas prices in Thailand would lead to a drop in these exports, reducing the supply shortages that result from the use of the gas by vehicles.

Last year, gas consumption among vehicles rose 51.6 per cent from 2005, while in the first 10 months of this year, it rose another 29.7 per cent year on year.

While commending the Energy Ministry's policy, KResearch said the ministry was yet to campaign for a better understanding from consumers on the reasons for its action. It said it took years for consumers to get used to the flotation of fuel-oil prices and that they now accepted that these prices needed to rise in line with market levels.

Still, the research house said with fuel-oil prices at record highs, now was not the right time to raise cooking-gas prices.

Due to higher gas prices, it is estimated that gas-fuelled taxis could ask for higher fares as their fuel costs are expected to rise Bt50 to Bt70 a day. Although one-dish meal costs would rise incrementally, consumers could complain of higher prices, because vendors do not raise their prices by satang units, but rather in full baht.

KResearch said despite the Bank of Thailand's announcement that a higher gas price carried a low weight in inflation calculations, it was possible that inflation in next year's first quarter could further increase if goods manufacturers won Commerce Ministry approval to raise their prices.

 The Nation


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