Benzene May Hit 45 Baht Per Liter & Diesel Could Hit 38 Baht Per Liter In The Next Few Days

[sriracha john]

Up again today....

Retail price of oil being increased again

Fuel prices at the pump rise again today by 50 satang per litre. The Finance and the Energy ministries plan to meet this week to seek new ways to encourage people to use alternative fuels. From today, the new price of premium petrol will be 37.59 baht a litre. Regular petrol will be 36.49 baht, gasohol 95 33.59 baht, gasohol 91 32.79 baht, and diesel 34.44 baht. Chaiwat Choorit, senior executive vice-president for the oil business unit at oil giant PTT Plc, said local pump prices were being raised to match the fuel rates on the world market.

On Friday, crude oil prices closed US$5-9 higher a barrel.

Continued here:

http://www.bangkokpost.net/News/12May2008_news14.php

[Plus]

It costs me about 200 Baht more to fill my minivan tank now than it cost a year ago. Not a big deal, I need about 6 tanks a month so that means 1,200 Baht more.

If you choose to take public transport instead you'd spend even more. It doesn't save money for heavy commuters like you.

For anyone making 9,000 (clerk in my office, who also drives to work) to say around 16,000 (average bank teller) Baht a month, there's only so much they can cut out before it's a choice between eating and driving.

But they don't fill the tank six times a month, do they? They probably fill up twice for 1,500 = 3,000 a month, a fairly average expense on transport unless you take one bus from your house to your office, and you are single.

[Heng]

It costs me about 200 Baht more to fill my minivan tank now than it cost a year ago. Not a big deal, I need about 6 tanks a month so that means 1,200 Baht more.

If you choose to take public transport instead you'd spend even more. It doesn't save money for heavy commuters like you.

For anyone making 9,000 (clerk in my office, who also drives to work) to say around 16,000 (average bank teller) Baht a month, there's only so much they can cut out before it's a choice between eating and driving.

But they don't fill the tank six times a month, do they? They probably fill up twice for 1,500 = 3,000 a month, a fairly average expense on transport unless you take one bus from your house to your office, and you are single.

Yeah, I wasn't suggesting that public transport would "save" me anything. Just the lack of flexibility would cost me more than it would be worth. But just pitting a 108 Baht bus ticket to Pattaya (whether from Morchid or the airport) though x 2 (roundtrip), + 100 Baht in fuel to have someone come and pick me up (x 2; to and from my homes here and there) vs. the 1,300 Baht for 3/4 of a tank it costs me + the 300 km maintainence I'll have to pay for later on my vehicle -round trip- in my van does indeed offer "just fuel/transport cost" savings though.

For the light commuting office crowd, I think our major difference is that you're averaging out costs assuming a 1-2 earner household with multiple dependents while I'm using a per unit average assuming one earner/expenses for one person basis (that like most places in the world, there are more people who prefer or by reason of necessity: make private/solo commutes instead of having several people in the same vehicle).

[Plus]

Jazz/Vios would go to Pattaya and back on something like 15-20 litres for 500-600 baht and carry the whole family. One single office clerk on 9k salary can't probably afford to go to Pattaya either way.

I see your point that these singles who got their cars from parents might have to cut on their travels and perhaps leave cars at home altogether, but to really save money they'd have to cut their social life, too, no more movies or shopping, no taxies, no motorcycles to beat the traffic, or they won't see any savings on transport.

If that guy lives with his family and doesn't spend on food or rent, he still doesn't need to switch to buses, just drive less, if he still hasn't done so.

I don't know how many drivers on the roads are from this group. Generally they don't drive, they don't get cars until the get sufficient income get married and buy a house. Even the poorest car buyers, people who spend 10-15k on monthly payments, can absorb higher transport costs in whatever form, either as increased bus fares or more expensive fuel.

[tropo]

I just wonder if there will be more door scratchers... I mean motorcycles... on the roads with the fuel prices skyrocketing.

Quite likely.

Of course there are going to be more motorcycles on the road in the near future. The motorcycle industry will be booming.

I'm not sure if it's a seasonal fluctuation, but there's been a lot less traffic (cars) on the roads in Pattaya lately. Roads which were totally grid locked a few weeks ago are now flowing freely.

[tropo]

You forget that people rarely drive upcountry alone. Add all the bus tickets for a family + motorcycle/taxi rides to and from the bus station, and driving looks super cheap again. It's definitely cheaper for a family to drive to Pattaya than travel to Ekamai and then pay for the bus and Pattaya's local transport options.

You consider the price of the vehicle irrelevant, but you've missed a very important cost factor: Vehicle Depreciation. You cannot escape this. In the real world it is added to the per kilometer running cost of a car.

At some stage you will have to sell, trade or scrap your vehicle and buy a replacement. If you happen to have a large capacity gas guzzler your resale value will be dismal, futher increasing this cost.

People using public transport can rest easy knowing they are not losing 10% - 20% or more of their "investment" every year.

When all the costs are considered, it's far cheaper to ride the bus - even for a family.

Edited May 12, 2008 by tropo

[moo9]

I just wonder if there will be more door scratchers... I mean motorcycles... on the roads with the fuel prices skyrocketing.

Quite likely.

Of course there are going to be more motorcycles on the road in the near future. The motorcycle industry will be booming.

I'm not sure if it's a seasonal fluctuation, but there's been a lot less traffic (cars) on the roads in Pattaya lately. Roads which were totally grid locked a few weeks ago are now flowing freely.

I might be wrong, but in Pattaya I already noticed more motorcycles on the roads compared with one year ago or so.

Yes, traffic seems to be lower too, now we should get the big tour buses off the road *coughing*

[bannork]

It's becoming more and more plain that within Bangkok a lot of people could save money by cycling. It's flat and apart from the savings in fuel think of the health benefits. I suggest Mr Apirak proposes exclusive bicycle lanes with shower facilities provided near or at work places.

[Heng]

Jazz/Vios would go to Pattaya and back on something like 15-20 litres for 500-600 baht and carry the whole family. One single office clerk on 9k salary can't probably afford to go to Pattaya either way.

I see your point that these singles who got their cars from parents might have to cut on their travels and perhaps leave cars at home altogether, but to really save money they'd have to cut their social life, too, no more movies or shopping, no taxies, no motorcycles to beat the traffic, or they won't see any savings on transport.

If that guy lives with his family and doesn't spend on food or rent, he still doesn't need to switch to buses, just drive less, if he still hasn't done so.

I don't know how many drivers on the roads are from this group. Generally they don't drive, they don't get cars until the get sufficient income get married and buy a house. Even the poorest car buyers, people who spend 10-15k on monthly payments, can absorb higher transport costs in whatever form, either as increased bus fares or more expensive fuel.

Well, most folks can't just change their vehicles just because fuel prices might warrant it. A Jazz/Vios can carry a family if you pack everyone in and not allow anyone to take anything more than an extra set of clothes... Might be a little dangerous too, since my computer monitor would block out my drivers left side vision (much of the lefthand side of the windshield). That could cost a lot more than a bus trip (or just continuing to use my less fuel efficient V-6 mobile lounge). Plenty of less well off Bangkok residents take day and often 1 day/1 night jaunts to Pattaya, Bangsaan, Sriracha, etc. Heck even people from our speaker factory do it, and these people are making just over minimum wage. These are the folks who you often see drinking beer from 7-11, getting a bbq/clay pot grill with which to cook a 1/2 kg. of low grade seafood and hanging out in the parking areas of public beaches. They do pile into some unlucky person's car or truck and often take the bus down as well.

We can probably come up with scenarios that cost more or less all day.

BTW, I'm looking at the segment beneath those who get cars and homes as gifts, as that segment probably still uses "central family funds" (or "krong sri") as well, so they likely have a lot more latitude than singles who bought their own cars (financed), don't live at their family home, and either rent or finance an apartment, home or condo. In the city, and especially true in Bangkok, these are often non-Bangkok origin folks (which as you know far outnumber native city folks). It's this segment which IMO is the largest and most vulnerable to price spikes of any commodity, and especially several at the same time.

[Heng]

It's becoming more and more plain that within Bangkok a lot of people could save money by cycling. It's flat and apart from the savings in fuel think of the health benefits. I suggest Mr Apirak proposes exclusive bicycle lanes with shower facilities provided near or at work places.

Push cart vendors, intersection urchins, and the homeless would certainly appreciate that.

[Heng]

I just wonder if there will be more door scratchers... I mean motorcycles... on the roads with the fuel prices skyrocketing.

Quite likely.

Of course there are going to be more motorcycles on the road in the near future. The motorcycle industry will be booming.

I'm not sure if it's a seasonal fluctuation, but there's been a lot less traffic (cars) on the roads in Pattaya lately. Roads which were totally grid locked a few weeks ago are now flowing freely.

I might be wrong, but in Pattaya I already noticed more motorcycles on the roads compared with one year ago or so.

Yes, traffic seems to be lower too, now we should get the big tour buses off the road *coughing*

Pattaya has always been pretty easy for me traffic wise, because much of the city doesn't wake up until the late morning. I can run all of my errands (usually just a couple of bank visits and maybe a land dept. stop) in an hour and be done by 11am everyday.

Hard to say with Pattaya getting better or worse... especially with all of that construction happening on Sukhumvit. When that clears up, it'll probably be easier to guage.

[Plus]

I'm looking at the segment beneath those who get cars and homes as gifts, as that segment probably still uses "central family funds" (or "krong sri") as well, so they likely have a lot more latitude than singles who bought their own cars (financed), don't live at their family home, and either rent or finance an apartment, home or condo.

Yes, these people are more vulnerable, but they don't generally buy cars. These people tend to rely on BTS/MRT nowadays as they can rent a place anywhere they want, and it's a good sign as they set general trends with their metropolitan lifestyle.

>>>>

Depreciation costs are just as irrelevant as initial price - taking a bus doesn't slow it down. You might just as well drive since you are losing money as the car ages anyway.

[Heng]

I'm looking at the segment beneath those who get cars and homes as gifts, as that segment probably still uses "central family funds" (or "krong sri") as well, so they likely have a lot more latitude than singles who bought their own cars (financed), don't live at their family home, and either rent or finance an apartment, home or condo.

Yes, these people are more vulnerable, but they don't generally buy cars. These people tend to rely on BTS/MRT nowadays as they can rent a place anywhere they want, and it's a good sign as they set general trends with their metropolitan lifestyle.

>>>>

Depreciation costs are just as irrelevant as initial price - taking a bus doesn't slow it down. You might just as well drive since you are losing money as the car ages anyway.

Most don't but they do IMO make up most of the motorists on the road. There is hardly enough BTS/MRT coverage to cover even a fraction of this group.

>>>>

Except that it usually costs more to drive of course.

[PeaceBlondie]

If I may interrupt Heng's and Plus's discussion, here are some comments from one of my best friends, on the effect that oil future speculators have on the price of oil. He has bachelor and master degrees in accounting (CPA), doctor of law (licensed attorney), and an MBA in marketing.

"Everyone seemingly is in near hysteria over the price of oil. So, for now, no one wants to be the seller of oil futures. The result is an imbalance between the higher number of speculators who want to buy oil future contracts, versus those few willing to sell. It's simple supply and demand - the price of oil futures will be pushed up in this case. But, the demand for futures is not the same thing as demand for real oil barrels.

For a while, price increases for actual oil will reflect those future prices, if for no other reason than the core function of the market for futures contract is to provide user and sellers of oil based products hedges on the price of real oil. If a user of oil has purchased oil futures, the cost of those futures are going to be a cost of the oil based product, be it food, gas or plastic.

For a while, hysteria by the speculators in the oil market can force up prices. But, to the extent that the speculators' futures markets presumptions are hysteria based, a severe imbalance in supply and demand for futures will run up the cost of those futures for the hedgers. But, ultimately, the demand curve for for actual oil will control the price of the real thing, as will be necessary for the market to absorb all the real oil that is available,

As the cost of real oil drops, the hysteria in the oil futures will deflate and the pump prices will drop in line with the lower cost of real oil. I'm not saying we'll go back to $1.75 [uS4 per gallon] or that the price of oil will never increase again, but the present spike in the prices of goods made with oil will drop. I'll be watching to see whether I am correct."

Do you agree?

[Heng]

If I may interrupt Heng's and Plus's discussion, here are some comments from one of my best friends, on the effect that oil future speculators have on the price of oil. He has bachelor and master degrees in accounting (CPA), doctor of law (licensed attorney), and an MBA in marketing.

"Everyone seemingly is in near hysteria over the price of oil. So, for now, no one wants to be the seller of oil futures. The result is an imbalance between the higher number of speculators who want to buy oil future contracts, versus those few willing to sell. It's simple supply and demand - the price of oil futures will be pushed up in this case. But, the demand for futures is not the same thing as demand for real oil barrels.

For a while, price increases for actual oil will reflect those future prices, if for no other reason than the core function of the market for futures contract is to provide user and sellers of oil based products hedges on the price of real oil. If a user of oil has purchased oil futures, the cost of those futures are going to be a cost of the oil based product, be it food, gas or plastic.

For a while, hysteria by the speculators in the oil market can force up prices. But, to the extent that the speculators' futures markets presumptions are hysteria based, a severe imbalance in supply and demand for futures will run up the cost of those futures for the hedgers. But, ultimately, the demand curve for for actual oil will control the price of the real thing, as will be necessary for the market to absorb all the real oil that is available,

As the cost of real oil drops, the hysteria in the oil futures will deflate and the pump prices will drop in line with the lower cost of real oil. I'm not saying we'll go back to $1.75 [uS4 per gallon] or that the price of oil will never increase again, but the present spike in the prices of goods made with oil will drop. I'll be watching to see whether I am correct."

Do you agree?

Well, that kind of sounds like he's writing off a lot to traders'/speculators' hysteria. I was under the impression that the underlying causes of all of the "excitement" are mostly real: ever increasing (and for the foreseeable future) demand from China, India, and much of Eastern Asia, South America, etc. coupled with uncertain (and likely to remain so for the foreseeable future) supply from Iraq, Iran, Russia, Nigeria, etc.

But seriously PB, do you think riding the bus is more economical than driving your own car or vice versa?

[scotbeve]

You forget that people rarely drive upcountry alone. Add all the bus tickets for a family + motorcycle/taxi rides to and from the bus station, and driving looks super cheap again. It's definitely cheaper for a family to drive to Pattaya than travel to Ekamai and then pay for the bus and Pattaya's local transport options.

You consider the price of the vehicle irrelevant, but you've missed a very important cost factor: Vehicle Depreciation. You cannot escape this. In the real world it is added to the per kilometer running cost of a car.

At some stage you will have to sell, trade or scrap your vehicle and buy a replacement. If you happen to have a large capacity gas guzzler your resale value will be dismal, futher increasing this cost.

People using public transport can rest easy knowing they are not losing 10% - 20% or more of their "investment" every year.

When all the costs are considered, it's far cheaper to ride the bus - even for a family.

Too true about depreciation! Drive a new car off the lot and it depreciates 20 - 25%!!!!

[Rinrada]

or maybe a hang glider...

[Plus]

Most don't but they do IMO make up most of the motorists on the road. There is hardly enough BTS/MRT coverage to cover even a fraction of this group.

I think I confused two groups of people. I was talking about young upcoming professionals who don't see a car as a necessity in their metrosexual/metropolitan lives.

Young brats who beg their parents for a car but don't have enough pocket money to pay for gas - well, they don't make a majority, I hope.

[Heng]

Again, just IMO, I don't think the yuppie and yumpie groups make up the majority. Although sure, they are part of the mix.

IMO the brat group doesn't make anywhere near a majority. Any reason why you seem to hold these folks in contempt? Did you know that not all kids "ask" for cars, homes, property, and inheritance? Sometimes they are just handed over like GI Joe or Barbie as a stocking stuffer for Christmas. Just because they can't fit under a tree... I don't think that somehow makes these kids brats. I think you've mentioned this a few times now.

I know for Heng Jr., I'll likely just wait until he's 15-16 and just ask him what kind of car he wants. And then get him something "much more practical."

[Smithson]

I know for Heng Jr., I'll likely just wait until he's 15-16 and just ask him what kind of car he wants. And then get him something "much more practical."

Will he be driving at 16?

[Heng]

I know for Heng Jr., I'll likely just wait until he's 15-16 and just ask him what kind of car he wants. And then get him something "much more practical."

Will he be driving at 16?

Yes, when we're stateside. Here he'll have to wait until he's 18.

[PeaceBlondie]

But seriously PB, do you think riding the bus is more economical than driving your own car or vice versa?

Depends: Houston, Austin, San Antonio

Heng, you and Plus are only arguing Bangkok. Mass public transport in the 85% rest of this country is nearly nonexistent. Most Bangcockians ....I do not know or care what they do.

My motosai is more economical than driving my Nissan NV, disregarding depreciation (which is not disregardable in the long term). Riding the bus, almost everywhere in the world, requires standing outside, making connections, riding with whackos and smellies. Skytrains and BKK Metro are exceptional.

I see Thais all over this country buying the American love affair with four wheels, the bigger wheels, the better. That is a far cry from self-sufficiency.

[Heng]

Just to clarify, we're arguing about a reduction in traffic or retarded growth of said traffic... which doesn't necessarily mean going with public transportation (although "buses" in other parts of the country can be seen in the form of converted pickup trucks), it can also mean car pooling and driving less.

[Ijustwannateach]

Plus, I had to admit it was hard for me to see your side of this argument until I realised you were talking about moving around the family, too. For me as a single guy with no dependents, I have set my life up around the public transport and it is pretty cheap so far (especially the subway) compared to what a car would be- when I consider insurance, gas, maintenance, and traffic time. True, if I want to go that extra bit faster one or two motorcycles drive up costs quickly, but I don't *have* to do that- I can just take a little more time and walk 10 more minutes.

However, if I had to have 1-2 extra people with me on many of these trips, that would change the equations a lot (and there's a question of whether you want your kids to be on motorcycles, etc.).

I think how many are in your party and exactly where you live and where you have to get to matter a lot in these equations- it seems very hard to me to generalise about this.

[Plus]

I don't hold "brats" in contempt, the ones I know who got cars as hand-me-downs are nice and polite kids, far more pleasant than metrosexual group.

Generally the majority of drivers in Bangkok earned their cars and paid for them with their sweat, after already buying houses - stable middle class with either small businesses or steady, well paying jobs. Many have two cars per household, too. For them buses are either not an option or not worth the trouble even if it was cheaper. They are the ones buying cars this year like crazy, we'll probably get a new record. Traffic is not going to be any thinner.

PB, Thais don't have a love affair with big cars with lots of power like Americans do. None of the Thai pickups even approaches the size of an average American truck, and the engines across the board are half the size of Americans, too. No V6 let alone V8, 99% under 2l. Often most popular engines here do not even exist there, like 1.6l Ford Focus or Mazda or 2l Camry/Accord or BMW 320 or most Benzes, and, correspondingly, we don't have 2.3l Focus/Mazdas at all.

I think Thais like to talk big but won't put their money where their mouths are.

[Heng]

I don't hold "brats" in contempt, the ones I know who got cars as hand-me-downs are nice and polite kids, far more pleasant than metrosexual group.

Generally the majority of drivers in Bangkok earned their cars and paid for them with their sweat, after already buying houses - stable middle class with either small businesses or steady, well paying jobs. Many have two cars per household, too. For them buses are either not an option or not worth the trouble even if it was cheaper. They are the ones buying cars this year like crazy, we'll probably get a new record. Traffic is not going to be any thinner.

PB, Thais don't have a love affair with big cars with lots of power like Americans do. None of the Thai pickups even approaches the size of an average American truck, and the engines across the board are half the size of Americans, too. No V6 let alone V8, 99% under 2l. Often most popular engines here do not even exist there, like 1.6l Ford Focus or Mazda or 2l Camry/Accord or BMW 320 or most Benzes, and, correspondingly, we don't have 2.3l Focus/Mazdas at all.

I think Thais like to talk big but won't put their money where their mouths are.

All good then, I'm sure the brats would forgive you.

There's a good number that fit into that group of majority of drivers you mention, but again IMO they are outnumbered by the group that may already own homes, but are heavily leveraged with debt for both their homes and cars. Traffic is already thinner and at the very least isn't growing as fast as it would without higher fuel and food overhead.

Talk or no talk, they tend to pay a lot more per vehicle than they'd have to in a lot of places in the world (and the only people who seem to be whinging "Blimey, $50,000 for an Accord?!" about local car prices seem to be foreigners).

[scotbeve]

I don't hold "brats" in contempt, the ones I know who got cars as hand-me-downs are nice and polite kids, far more pleasant than metrosexual group.

Generally the majority of drivers in Bangkok earned their cars and paid for them with their sweat, after already buying houses - stable middle class with either small businesses or steady, well paying jobs. Many have two cars per household, too. For them buses are either not an option or not worth the trouble even if it was cheaper. They are the ones buying cars this year like crazy, we'll probably get a new record. Traffic is not going to be any thinner.

PB, Thais don't have a love affair with big cars with lots of power like Americans do. None of the Thai pickups even approaches the size of an average American truck, and the engines across the board are half the size of Americans, too. No V6 let alone V8, 99% under 2l. Often most popular engines here do not even exist there, like 1.6l Ford Focus or Mazda or 2l Camry/Accord or BMW 320 or most Benzes, and, correspondingly, we don't have 2.3l Focus/Mazdas at all.

I think Thais like to talk big but won't put their money where their mouths are.

All good then, I'm sure the brats would forgive you.

There's a good number that fit into that group of majority of drivers you mention, but again IMO they are outnumbered by the group that may already own homes, but are heavily leveraged with debt for both their homes and cars. Traffic is already thinner and at the very least isn't growing as fast as it would without higher fuel and food overhead.

Talk or no talk, they tend to pay a lot more per vehicle than they'd have to in a lot of places in the world (and the only people who seem to be whinging "Blimey, $50,000 for an Accord?!" about local car prices seem to be foreigners).

Heng,

You have to admit that the cars in Thailand (MADE IN THAILAND!!!) are exceptionally expensive. My car would cost 42K$ to 43K$ in the US...

[Plus]

Cars are cheap, taxes are high.

But then I rememeber reading that productivity at a Ford plant in Rayong is six time lower than in the US.

[PeaceBlondie]

My comment about Thais mimicing Americans with a love affair for bigger cars was not aimed at 6-liter V8s. Many of my cars in the USA had 0.75 to 2.5 liter engines (my last one was 2.4 liters, 150 hp). But come to think of it, living on ThaiVisa has plunged me into a world where even Fortuners are considered lower-level SUV's, and my old 1.6 Nissan is considered tiny.

We are talking all over the landscape, from BKK to Chiang Rai, from 100cc Dreams made 15 years ago, to 5-series BMW's and big Mercedes. From rich to poor, from non-air public buses to chauffer driven saloons.

[sriracha john]

Up again today....

Retail price of oil being increased again

Fuel prices at the pump rise again today by 50 satang per litre. The Finance and the Energy ministries plan to meet this week to seek new ways to encourage people to use alternative fuels. From today, the new price of premium petrol will be 37.59 baht a litre. Regular petrol will be 36.49 baht, gasohol 95 33.59 baht, gasohol 91 32.79 baht, and diesel 34.44 baht. Chaiwat Choorit, senior executive vice-president for the oil business unit at oil giant PTT Plc, said local pump prices were being raised to match the fuel rates on the world market.

On Friday, crude oil prices closed US$5-9 higher a barrel.

Continued here:

http://www.bangkokpost.net/News/12May2008_news14.php

Another day... another price hike....

BREAKING NEWS:

Shell to Increase Pump Prices by 80 Satang/Liter Tomorrow

Shell, one of Thailand's largest oil conglomerates, will raise retail pump prices by 80 satang tomorrow. Benzene 95 will cost 38.39 baht per liter, while diesel will sell for 34.24 baht per liter.

- Thailand Outlook (today)