Thailand Raises Retail Fuel Prices To Record High As Global Crude Oil Prices Soar

[sriracha john]

Thailand Raises Retail Fuel Prices to Record High As Global Crude Oil Prices Soar

BANGKOK, Thailand -- PTT PCL, Thailand's oil and gas conglomerate, raised its retail gasoline, diesel and biofuel prices just over 1 percent to records amid soaring global crude oil prices, according to a media report Friday.

Prices at the pump were raised 1.3 cents per liter, according to the Bangkok Post. That amounts to 1.2-1.4 percent for fuel grades from 5 percent biodiesel to premium gasoline.

PTT dominates Thailand's retail fuel sales with a 34 percent share of the market, and most retail operators follow PTT pricing.

The company blamed the increase on the sharp rise in global oil prices, the Post said. Crude oil futures on the New York Mercantile Exchange hit a record $99.29 a barrel earlier this week and were trading above $97 a barrel Friday.

Premium gasoline is now at $1.06 a liter; regular is at $1.01 a liter; high speed diesel is at 94 cents a liter; and 5 percent biodiesel is at 91 cents a liter.

Other companies operating retail fuel stations in the country -- including Royal Dutch Shell PLC, Chevron Corp. and Malaysia's Petroliam Nasional Bhd. -- have set their pump prices Friday at the same level as PTT, according to the Energy Policy and Planning Office of Thailand's Ministry of Energy.

- Associated Press

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Thailand Rules Out Oil Subsidy As Pump Prices Hit Record High

BANGKOK - Thailand's Energy Ministry has ruled out subsidies to shield consumers and businesses from the rising cost of fuel even as the country's pump prices hit a record high.

"We have seen retail prices of all oil products hitting an all time high. If the global oil price continues to soar, oil companies are likely to raise retail prices again next week," the Energy Policy and Planning Office's chief Viraphol Jirapraditkul told Dow Jones Newswires.

Seven Thai oil companies raised gasoline and diesel pump prices by THB0.40 a liter on Friday. Premium and regular gasoline now costs THB32.89/liter and THB31.59/liter respectively and high-speed diesel costs THB29.34/liter.

The ministry won't provide a direct subsidy nor expand existing measures to indirectly stem the increase in prices, Viraphol said.

Earlier this month, the ministry reduced the amount of money that oil companies must pay into the state Oil Fund from sales of diesel and gasoline to soften the blow of higher fuel costs on consumers. The reduction in levies helped slow the increase in prices.

"I don't expect to see further reduction in the levies since we need to clear the debt of the state Oil Fund," Viraphol said.

Between January 2004 and July 2005, the government subsidized fuel prices at a total cost of THB92 billion ($2. 7 billion).

- Dow Jones Newswires

Edited November 23, 2007 by sriracha john

[apetley]

When I first visited Thailand in 2001 prices were around 12-13 Bht per litre so prices like this are really hitting the locals hard.

Mind you, as a Brit, these prices are less than half of what there are back home so I wont complain.

Good exercise for my wife too as she now rides her bicycle the 100m to the market rather than take her Mio.

[Ricardo]

Interesting that, this time round, there is no attempt to defer the very-real price-increases until after the election.

Contrasted to the heavy subsidies (Sorry - price-smoothing) under TRT/DL, the cost of which is still being recovered, via the Oil-Fund levy.

[samran]

one of the ironies of this government. They aren't elected and they can afford to make a tough decision like this (which in my opinion is the right one).

Anyway, bring on the election.

[Firefan]

This is a natural open market price increase and subsidies would just fail (remember the recent Thai Baht fiasco?) as they always do.

Fuel increases invariably means even more inflation pressure as fuel used for practically everything.

Cheers!

[JetsetBkk]

When I first visited Thailand in 2001 prices were around 12-13 Bht per litre

Ah, those were the days! 1 baht per kilometre in a pick-up.

[PeaceBlondie]

I think the lead article, which quotes prices per gallon by the US$, uses the offshore rates. I just paid 31.64 per liter for 91 benzene, which is not one dollar. It comes out to $3.54 per gallon, I think.

[sriracha john]

I agree PB...going to a local news source... to reiterate actual pricing from the second article..

Ministry repeats: No subsidy for oil prices

The Energy Ministry will not cut contributions of oil companies to state Oil Fund even after pump prices hit a record high on Friday. Energy Minister Piyasvasti Amranand said the government will not try to solve the problem of rising oil prices that way because it is a short-term solution. *very true* On Friday, seven oil companies raised gasoline and diesel prices by 40 satang per litre. Premium and regular gasoline cost 32.89 baht/litre and 31.59 baht/litre respectively. Diesel price is at 29.34 baht/litre.

Continued here:

http://www.bangkokpost.com/breaking_news/b...s.php?id=123868

[bdenner]

Diesel went over 30 Baht yesterday here in the rice paddies for the 1st time. A dramatic reduction in traffic on the roads is a blessing but one feels a little pity for the Thais as their income has hardly risen since 2001 and they are being hurt by the inflationry effect. The going rate here is still only 120 to 140 Baht per day for the rice harvesters and other labourers.

[sriracha john]

Here's why it was such a bad move by the previous government... and hoping the new government won't go back to it....

Legal change could make fuel subsidies history

The Energy Ministry is considering scrapping current rules allowing the state Oil Fund to borrow from commercial banks and financial institutions. Energy Minister Piyasvasti Amranand said the change would eliminate a loophole that could be used by future governments to subsidise fuel prices through the fund through bank loans. The Oil Fund collects a levy of four baht per litre on premium petrol, 3.30 baht on regular petrol and 1.10 baht on diesel sales. No levies are collected for gasohol 95 sales while gasohol 91 is charged 20 satang per litre. From 2004 to 2005, the Thaksin Shinawatra government ran up debt of almost 100 Billion Baht for the fund by capping petrol and diesel prices. Piyasvasti said fuel subsidies not only incurred massive debts for the state, but also encouraged smuggling.

Continued here:

http://www.bangkokpost.com/Business/24Nov2007_biz33.php

Edited November 24, 2007 by sriracha john

[plachon]

Diesel went over 30 Baht yesterday here in the rice paddies for the 1st time. A dramatic reduction in traffic on the roads is a blessing but one feels a little pity for the Thais as their income has hardly risen since 2001 and they are being hurt by the inflationry effect. The going rate here is still only 120 to 140 Baht per day for the rice harvesters and other labourers.

Although I see your point, the Thai rural standard of living and income levels are not so much governed by the going rate of on-farm labour (a minority occupation), but far more by off-farm factors, such as urban employment levels, daily wage levels in factories, opportunities for overseas work and yes, cost of urban living. Whereas, wages tend to rise incrementally by small steps (e.g. 2 or 3 baht additions to the min daily wage), items which dominate the poor's monthly cost of living (esp. food, transport and medical care), tend to rise in much larger increments.

For example, the cost of a bowl of noodles tends to jump in 5 or sometimes 10 baht leaps, and so does the cost of the motorbike taxi ride from the mouth of the soi to the shack or factory down the end. Thus, it is the impact of rising fuel costs on these "essentials" that is really critical to how much an urban worker can save and send home in a month to support all the in-laws and hangers-on at home. I would maintain that 130 baht a day (plus lunch and some lao khao to boot) in the village harvesting rice is far better that 260 baht a day working in a Bangkok factory with all the overheads that go with it. What would really hurt Isaan now is a rise in urban unemployment and a concurrent laying off of migrant workers overseas in countries like Taiwan, Brunei, Israel, Singapore and the Middle-east oil states which still hire Thais. That would be a disaster for millions now reliant on these sources of income who hardly ever go near their rice fields.

[sriracha john]

Going up again today with new record highs.....

40 Satang Oil Price Hike

All oil traders except for PTT have announced a 40 satang oil price hike, effective on Wednesday.

The 40 satang price hike by all domestic oil traders, except for PTT, brings domestic oil price to a record high. Benzene 95 will be sold at 33.29 baht per litre, while benzene 91 will reach 31 baht 99 satang per litre.

Prices of gasohol 95 and gasohol 91 will be 29.29 baht per litre and 28.49 baht per litre respectively. Diesel will be sold at 29.74 baht per litre.

PTT President Prasert Boonsampan says oil traders are currently suffering losses since retail prices have equaled to ex-refinery prices, forcing them to absorb additional costs of 1.50 baht per liter.

Prasert says PTT is in the red by 40 million baht daily.

In the meantime, Energy Minister Piyasawad Amranant says the ministry has decided to cut the diesel contribution to the Oil Fund by 20 satang per liter, effective on Wednesday. This would help alleviate pressure on the diesel price, but the Oil Fund will suffer from a loss in revenue of 315 million baht a month.

Regarding the liquefied petroleum gas (LPG) price floatation on December 1, the ministry will increase the price by 1.29 baht. As a result, the price of a 15-kilogram cooking gas cylinders will jump by 19-20 baht.

- Thailand Outlook

[tijnebijn]

Prices go higher , still I do not see any big differences on the highways though ,

or the shopping habbits of many Thais , still I wonder if the prices turn to 40 Baht the litre

how things will look like , guess very quite , in one way a bless the other way a nightmare

people will stop spending and local businesses like my gf's will suffer most .

Its time for the dollar to find their way up instead of downtrend , sooner or later a recession

will follow all over the globe .

[astral]

It comes out to $3.54 per gallon, I think.

Is that the Imperial Gallon

or the short measure American one?

In the UK petrol is over One Pound (70 baht) a litre.

[chanchao]

It is the dawning of a new age.. Fuel prices will go up, up, up.. Faster and faster.

I'm going to buy a Honda Dream.

[marquess]

went to my local Tescos on Sunday and was shocked to see that Dutch Mill had gone up by 45% and to add to inflation the Don Muang Toll way is going up by 175% as of 21st Dec, but salaries are on the whole the same as they were five years ago.

[Phil Conners]

Thailand is still one of the cheapest places in the world for gas, only beat by the major arab oil producing countries.

[sweetchariot]

Just doing a quick calculation over the last 18 months:

Oil prices (in US $) up 23%

Thai baht vs US dollar up 22.6%

These are rough figures, but there or there abouts. The oil prices dipped 18 months ago, and have risen approx 57% in the last 12 months (hence the hype), but looking at the 18 month picture surely the currency gains offset the increased prices?

This applies to the UK and Euro zone, so why are we all being brainwashed into believing we are paying higher prices at the pumps because of increasing costs, rather than stealth taxes which seems to be the case.

I am happy to learn if I have this all wrong, but my mathematics will stand up. Is there something I am missing?

[cclub75]

went to my local Tescos on Sunday and was shocked to see that Dutch Mill had gone up by 45% and to add to inflation the Don Muang Toll way is going up by 175% as of 21st Dec, but salaries are on the whole the same as they were five years ago.

You're in the wrong way on the toll way if I may say.

The anomaly, in the first place, was to reduce the toll from 55 to 30 in december 2004 (Thaksin did it before the elections, look here for details).

Therefore, to go back to 55 THB is not really inflation. A mere return to normality.

[sriracha john]

Just doing a quick calculation over the last 18 months:

Oil prices (in US $) up 23%

Thai baht vs US dollar up 22.6%

These are rough figures, but there or there abouts. The oil prices dipped 18 months ago, and have risen approx 57% in the last 12 months (hence the hype), but looking at the 18 month picture surely the currency gains offset the increased prices?

This applies to the UK and Euro zone, so why are we all being brainwashed into believing we are paying higher prices at the pumps because of increasing costs, rather than stealth taxes which seems to be the case.

I am happy to learn if I have this all wrong, but my mathematics will stand up. Is there something I am missing?

Yes!.... consideration of people being paid in U.S. dollars and living in Thailand.

I'm no economic guru, but between the rise in the baht and the rise in fuel prices, I'm paying ( 57 x 22.6 = ) 1288.2% more at the pump!!

ok, I'm not really THAT bad with the math....

but it sure is a lot more than before...

Edited November 28, 2007 by sriracha john

[glasshock]

Ive been praying for the back of the UK prices when we leave for Thailand but now it looks as though its getting that way over there too!!

UK ..... cheapest per litre now £1.08 I have seen it as high as £1.12

80% of it's tax!!!

Edited November 28, 2007 by glasshock

[soundman]

went to my local Tescos on Sunday and was shocked to see that Dutch Mill had gone up by 45% and to add to inflation the Don Muang Toll way is going up by 175% as of 21st Dec, but salaries are on the whole the same as they were five years ago.

You're in the wrong way on the toll way if I may say.

The anomaly, in the first place, was to reduce the toll from 55 to 30 in december 2004 (Thaksin did it before the elections, look here for details).

Therefore, to go back to 55 THB is not really inflation. A mere return to normality.

Without the congestion of the old airport & taking into account the over zealous police on the dorn muang tollway, most hours of the day it makes more sense drive underneath for free & no real loss in driving time....

[PeaceBlondie]

It comes out to $3.54 per gallon, I think.

Is that the Imperial Gallon

or the short measure American one?

In the UK petrol is over One Pound (70 baht) a litre.

Sorry, of course being from Texas , that was a US gallon. I thought the empire was dead, but I guess Queen Victoria still has Prince Albert in a can!

Anyway, my figure is out of date already. Jet gas station is charging 33.64 for a liter of something 95 octane (probably benzene), and that's perilously close to one American Dollar per one American gallon.

[TheDon]

You still have it good in Thailand with petrol, Sydney is much more expensive.

The UK is even worse

[Heng]

Hopefully this will mean easier driving on the tollways, finally.

[Chloe82]

All this and the global price of crude has dropped over the last 4-5 days.

I don't drive here anyway so i could not care less what the price of fuel is.