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Published on March 14, 2008

Energy Minister Poonpirom Liptapanlop said the 90-satang-per-litre subsidy, approved on Wednesday, would provide temporary relief but the domestic retail price would follow the global trend.

"Still, I don't believe that diesel will be as high as $150 a barrel as expected," she said.

PTT president Prasert Bunsumpun said the company would consider if its pump prices must be raised again in one or two days, after petrol and gasohol prices were hiked by 50 satang yesterday. Diesel could go up by 40-50 satang, despite the 90-satang subsidy.

PTT has shouldered a loss of over Bt1 billion from its retail oil business since last month, as it has tried to delay price hikes on the back of soaring global oil prices.

Since PTT stations sell diesel for Bt1 cheaper than other retailers, their sales have jumped from 15 million litres a day to 20 million. To ease the shortage, PTT plans to ask the Energy Ministry to relax its oil reserve requirement.

Other retailers have raised the diesel price to Bt30.94, though the actual cost is Bt32, meaning that all players are suffering from a negative marketing margin.

Oil futures ended yesterday at $109.80 a barrel in Singapore after touching $110.12 earlier in the session, just below Wednesday's record trading high of $110.20.

Oil expert Manoon Siriwan said in a television programme that with speculation increasing as investors look to commodities as a safe haven against the US dollar's slide, oil futures could see $120 soon.

Energy Reporters

The Nation