Oil price hikes force THAI to raise surcharge

[george]

Oil price hikes force THAI to raise surcharge

BANGKOK: -- Thai Airways International Public Company Limited (THAI), the national flag carrier, has decided to increase its surcharge for all types of passengers due to continuing oil price hikes, a THAI executive announced here on Friday.

Mr. Somchainuk Engtrakul, a THAI board member who was recently appointed to perform his duty on behalf of the company's President, Kanok Abhiradee, told journalists here that the new surcharge has been added to air fares of all THAI's tickets booked or purchased at the company's sale offices and agents throughout the country since 16 August.

He disclosed that the surcharge would, however, be imposed on all air tickets booked or purchased from THAI's sale offices and agents abroad from 5 September.

The surcharge ranges from Bt 300 per trip, or Bt 600 per a round trip, for all domestic routes--from Bt 200 per trip previously--to US$25 (about Bt 1,000) per trip on all Asian and Middle Eastern routes--from US$20 (about Bt 800)--and US$50 (about Bt 2,000) per trip on Australia's, New Zealand's and all other inter-continental routes--from US$35 (about Bt 1,400) previously.

Mr. Somchainuk promised that the national airline would reduce the additional surcharge once the global oil situation returns to normal.

--TNA 2005-08-20

[manutoo]

Will the oil situation return to normal one day ?

Maybe we're going to see the end of cheap plane tickets, soon ...

Edited August 20, 2005 by manutoo

[Galong]

I don't get it... the US went to war to get cheap oil, the oil companies are making record profits, yet oil prices are going up.

I don't particularly like being sodomized by the oil companies... they should at least give us a 'reach-around'.

[loong]

I don't get it... the US went to war to get cheap oil, the oil companies are making record profits, yet oil prices are going up. 

I don't particularly like being sodomized by the oil companies... they should at least give us a 'reach-around'.

<{POST_SNAPBACK}>

Oil prices are set according to demand, not by the oil companies

You could blame OPEC for manipulating prices, I don't know if they are producing at anywhere near maximum production.

One good thing about the high oil prices is that it may make it more feasable to concentrate on more ecological - minded energy sources.

A diesel engine can run on vegetable oil, so when the cost of diesel exceeds the cost of vegetable oil in the shops, expect a cooking oil shortage.

[Roger_JG]

I don't get it... the US went to war to get cheap oil, the oil companies are making record profits, yet oil prices are going up. 

I don't particularly like being sodomized by the oil companies... they should at least give us a 'reach-around'.

<{POST_SNAPBACK}>

Simple ... with the increased habit to have 1 thai = 1 (big show off) car, the same belief in India and the extremely fast development of motoring in china, oil production does not follow and more importantly does not want to follow.

Oil producers are well aware that the "machine" is starting to get out of control and they do not want to loose their sole source of income faster than needed. The US have the Iraqi Oil, the rest of the world will fight for the scrap.

Expect another bubble to burst in Asia soon.. mark my words...

~S

[tallthai]

It seems to me that since 60 to 80% of the price of gasoline at the pump is government taxes, it should be really simple for the price to come down.

Simply reduce the government taxes on refined petroleum. If you do not believe this, why are the Brits paying over $6 per gallon, the Americans about $2.5 per gallon and the Saudi's about $.7 per gallon when the per barrel price is the same worldwide.

Tallthai

[Rinrada]

Tax

[Paul & Maneerat]

... er, will that mean the same price hike for foreigners as well as Thais?

[bkk_mike]

Tax

<{POST_SNAPBACK}>

Close - Tax in the UK keeping the price artificially high.

But subsidies in Saudi keeping the price artificially low. (helped of course, by less transportation costs to get the petrol there in the first place).

[capt_canada42]

Hard to say but I will bet money that Bush( he would never dare say so in public) wants to keep the price high so that he has the loyalty of the Saudi's and the Arabs.

Isn't Bush in the oil business thats really why he went to war in the first place.

As for refineries having all these problems I will bet this is more manipulation as its all about money, BIG MONEY.

[Ricardo]

Will the oil situation return to normal one day ?

Maybe we're going to see the end of cheap plane tickets, soon ...

<{POST_SNAPBACK}>

What IS normal ?

As Thai & other direct/non-stop flights increase their prices, expect more of us travellers paying for our own tickets to look harder for the cheaper alternatives, with the cut-price/subsidised-fuel operators in the Gulf (Saudia, Kuwait-Airways, Emirates, Quatar, Etihad & Gulf-Air) benefiting.

As higher oil-prices depress the world economy, and people cut back on travel and luxury long-haul holidays, the cut-price operators who manage to keep their planes flying full will survive, while the high-cost/inefficient operators suffer increased losses.

It doesn't look good for Thai Airways.

[Anon999]

The price of a barrel oil is controlled by the financial markets around the world, based on the price for forward orders in the future. It's called futures trading of contracts. All trading works the same when the demand is greater than the supply the price goes up and vice versa. When traders can see the price rising they want to buy 'futures contracts' which forces the price up, then when the price peaks they want to sell to make a profit. When the price falls due to over supply or lack of demand they sell or lose money unless long term traders. That is the principle but they often get it wrong as the price can reverse overnight.

The supply situation is out of the oil companies hands too because of wars or strikes in countries who are major producers, like Nigeria and also South America this year. Furthermore all oil refineries have to have maintenace carried out and there have also been fires too so there are many variables that can happen at the same time.

If you're lucky enough to live in a country like the UK. The government rips you off with over 80% of the pump price being tax so they can waste it on their pet schemes and employing ever more civil servants or giving it away to extremists who they have given residence to and who live off government benefits. Currently the price is in the order of £4.15 (over 300 baht) a gallon, 67 baht/litre and deisel costs even more.

The cost fuel to the airlines is controlled by world prices and now represents about 30% of their operating costs so ticket prices have to go up.

Edited August 20, 2005 by Anon999

[Martin]

The days of cheap oil are over.

Don't expect oil to ever drop below US$60 again.

These air-ticket surcharges will remind people to think about not being wasteful with oil.

But they will also make people think of holidaying closer to home. That is bad news for the Thai tourism industry, which is based on long-haul incomers.

On the other hand, the rises in heating-oil costs will cause people to think of wintering in a warmer country, or retiring there completely. Turning hotels in Thailand into Old Folks' Homes For Farangs may be a development that we see ere long.

[astral]

It seems to me that since 60 to 80% of the price of gasoline at the pump is government taxes, it should be really simple for the price to come down. 

Simply reduce the government taxes on refined petroleum.  If you do not believe this, why are the Brits paying over $6 per gallon, the Americans about $2.5 per gallon and the Saudi's about $.7 per gallon when the per barrel price is the same worldwide.

Tallthai

<{POST_SNAPBACK}>

Make that $8 an imperial gallon, in the UK!!

90p a litre

Not the US short measure.

[Anon999]

It seems to me that since 60 to 80% of the price of gasoline at the pump is government taxes, it should be really simple for the price to come down. 

Simply reduce the government taxes on refined petroleum.  If you do not believe this, why are the Brits paying over $6 per gallon, the Americans about $2.5 per gallon and the Saudi's about $.7 per gallon when the per barrel price is the same worldwide.

Tallthai

<{POST_SNAPBACK}>

Make that $8 an imperial gallon, in the UK!!

90p a litre

Not the US short measure.

<{POST_SNAPBACK}>

Yes about 92.8p/litre that's about 68.7baht/litre (£4.22 for an imperial gallon thats for Regular. Super is about £4.50/gallon). And rising!

Edited August 20, 2005 by Anon999

[loong]

Turning hotels in Thailand into Old Folks' Homes For Farangs may be a development that we see ere long.

Eeeeer.....isn't it here already?

[IMA_FARANG]

I don't get it... the US went to war to get cheap oil, the oil companies are making record profits, yet oil prices are going up. 

I don't particularly like being sodomized by the oil companies... they should at least give us a 'reach-around'.

<{POST_SNAPBACK}>

the US went to war to get cheap oil

Geez, I hope you don't really believe that?

Anyhow, oil prices are not really dependent on Crude Oil supply. The two major costs in gasoline prices are the profit to the oil companies and taxes taken by the government on the finished Oil products. The oil distribution companies are vertical corporations that add costs on up the line from the well up to the user. They take the crude oil out of the wells at about 1/10th of the cost they actually charge for the finished gasoline, they add the costs on all the way up the line by a series of dummy compnies affiliated with them. The added costs all come back to the oil compnies as profit, all paid for by the end user - the consumer.

Also don't count on oil prices going down soon. Especially with use in China going up all the time. The standard of living in China is going up, and oil use there is skyrocketing.

So expect to be paying more for air tickets for the near future.

[Rinrada]

Oil price hikes force THAI to raise surcharge

BANGKOK: -- Thai Airways International Public Company Limited (THAI), the national flag carrier, has decided to increase its surcharge for all types of passengers

He disclosed that the surcharge would, however, be imposed on all air tickets booked or purchased from THAI's sale offices and agents abroad from 5 September.

The surcharge ranges from Bt 300 per trip, or Bt 600 per a round trip, for all domestic routes--from Bt 200 per trip previously--to US$25 (about Bt 1,000) per trip on all Asian and Middle Eastern routes--from US$20 (about Bt 800)--and US$50 (about Bt 2,000) per trip on Australia's, New Zealand's and all other inter-continental routes--from US$35 (about Bt 1,400) previously.

Expression....Pricing yourself OUT of the Market.........comes to mind

You need people who WANT to pay these ridiculous Very expensive charges.....NO pay-No passengers.....NO Airline

[No beleeeeve!]

The whole "the US went to war for oil" arguement is pretty tired, old, and unsupported by facts at this stage of reality.

Let's think that accusation out. If the US were oil grabbers as accused, why didn't they go into I think it was Venezuala (or was it Argentina) when they were in political turmoil in I believe it was 2003? They are a top 5 or top 10 oil producing country, the US could have taken them over with an army of boy scouts in a couple days, and had tons of easy to take oil if that were the case. But they didn't do it. It would have been easier, less expensive, experienced less political fallout, and could have been done in the name of assisting in global stability (or whatever reason they could muster up).

How is the US financially benefitting from the oil in Irag now? They aren't at all. The war is COSTING the US money. Certain well placed companies are profiting big time from contracts (an entirely other issue), but the US is losing money from the war.

That being said, yes, oil prices are getting out of control yet people still drive around like mad.

Edited August 20, 2005 by No beleeeeve!

[Slingblade333]

The days of cheap oil are over.

Don't expect oil to ever drop below US$60 again.

Funny I had a bet with a friend, when oil was at $58, he said it would never see $50 again, I bet it would reach $40, it didn't but it came close at $40.71. I'd say it's likely to go below $50 again. It's just supply and demand. Long term there is no doubt that the cost of oil will keep rising, with china and world demand in general increasing. Opec does largely control the price but even opec can hurt itself by overcharging, creating opportunity for other oil countries/companies to increase sales. There are so many factors that determine price, alternative fuel, weather, consumer trends for buying cars, increased car buyers and drivers, wars, inflation, seasons, production capacity, taxes etc. Even Opec and Bush are limited with all these factors, it good (or bad, depending on your perspective) old fashioned market factors dictating price. The oil companies are making record profits but they are not doing anything different than they have always done. The more expensive oil becomes, the bigger the profit margin.

[meelousee]

There are some real valid points here, and there are some that are diluted.

Everyone pays more or less the same for a barrel of crude.

But not all oil is equal. Some oil is sweet and you can refine to gasoline in two steps, some has all sorts of impurities that they make lipstick, plastic, and so on. Some crude takes 4 steps Saudi sweet on two.

Supply and demand make some problems too.

Then there is the host country that is refining that crude, union’s drive up this cost as well. There is also many families of 5 that have 3 cars, keeping up with the Jones syndrome this is a big part of your home country gas price. DEMAND!

Then the Saudis and OPEC manipulate things, and choke capacity output to toe the line with the economics of getting out of the ground while keeping their stock holders happy. Aladdin and his lamp keep us strangled in the process.

THAI will continue to purse the same economics of all the above, I was wondering when they would do this, I thought it would have been 5 months ago as just about everyone that follows this kind of pinch on air travel did.

A survey went out in January and 4 out of 5 economist predicted oil at 65.5 to 72.5 buy the first quarter of 06.

Just a thought, Park it?

[samuislander]

I have a friend in Louisiana who inherited a small oil company in the Gulf of Mexico from his dad. When I was home in April I visited him in Water Proof, Lousiana. For many years he has received $32.00 USD a barrel for his oil, his cost to produce is about $18.00 USD a barrel as the well are production wells and the drilling costs already paid. Now he says it cost the same $ 18-20 USD a barrel to produce, but he is now receiving over $60 USD a barrel. He doesn't know why the prices are so high as his production prices have remained pretty much the same, but he sells it as fast as he can pump it out of the hole. As he is a “Good Ol Boy” he just puts the money in the bank and keeps on pumping dat oil.

[Martin]

Turning hotels in Thailand into Old Folks' Homes For Farangs may be a development that we see ere long.

Eeeeer.....isn't it here already?

<{POST_SNAPBACK}>

Am I getting to be 'behind the times', loong?

It is three years since I last visited the 'holiday triangle' of Chiang Mai, Pattaya and Phuket. At that time, there was clearly a Retired Single Men influx, and I met one retired headmaster who had a big,posh house in Scotland, who, at the beginning of winter, closed up his house and set the central-heating to just keep the place from freezing up and then came to Jomtien till the folloeing summer. He reckoned that what he saved on his bill for heating oil paid for his rent in Jomtien and his return fare.

But I didn't come across any signs of retired couples or of single farangs who would have otherwise been in Old Folks' Homes.

Are there really now hotels that specialise in looking after the "getting pretty decrepit" oldsters.

[loong]

Am I getting to be 'behind the times', loong?

Not at all.

I was just posting a bit tongue in cheek, Didn't intend to be taken seriously

[mamypocopants]

The whole "the US went to war for oil" arguement is pretty tired, old, and unsupported by facts at this stage of reality. 

Let's think that accusation out.  If the US were oil grabbers as accused, why didn't they go into I think it was Venezuala (or was it Argentina)  when they were in political turmoil in I believe it was 2003?  They are a top 5 or top 10 oil producing country, the US could have taken them over with an army of boy scouts in a couple days, and had tons of easy to take oil if that were the case.  But they didn't do it.  It would have been easier, less expensive, experienced less political fallout, and could have been done in the name of assisting in global stability (or whatever reason they could muster up).

How is the US financially benefitting from the oil in Irag now?  They aren't at all.  The war is COSTING the US money.  Certain well placed companies are profiting big time from contracts (an entirely other issue), but the US is losing money from the war.

That being said, yes, oil prices are getting out of control yet people still drive around like mad.

<{POST_SNAPBACK}>

Errrm, apart from oil what was the premise for going into Iraq? Hmmmm....

The USA, via the CIA, did try to orchestrate, or a least whole heartedly approve of and support, a coup in Venezuela in 2002. The USA has a long and documented history medelling in other countries affairs, particularly in South America, in order to achieve is economic desires. Nuff said....

http://www.counterpunch.org/reilly0415.html

[califdann]

Quote

"Oil prices are set according to demand, not by the oil companies

You could blame OPEC for manipulating prices, I don't know if they are producing at anywhere near maximum production."

In a natural market, prices are set by demand. When the demand exceeds the supply, the price goes up. As was stated, the supply is not being maximized.

But importantly, and often ignored, are the taxes that are added by the Fed and the State (here in USA, and elsewhere) which make up a substantial portion of the cost of a gallon of gas. Eliminate the tax on the gas we put in our tank, and you

be shocked by the fall in the cost to the consumer. This is not to say that the oil companies are making money.... which is why they are in business.... but no focus is paid to the outrageous tax on gas. Check it out on google....

Dann

[jrincon17]

Oil price hikes force THAI to raise surcharge 

BANGKOK: -- Thai Airways International Public Company Limited (THAI), the national flag carrier, has decided to increase its surcharge for all types of passengers due to continuing oil price hikes, a THAI executive announced here on Friday.

Mr. Somchainuk Engtrakul, a THAI board member who was recently appointed to perform his duty on behalf of the company's President, Kanok Abhiradee, told journalists here that the new surcharge has been added to air fares of all THAI's tickets booked or purchased at the company's sale offices and agents throughout the country since 16 August.

He disclosed that the surcharge would, however, be imposed on all air tickets booked or purchased from THAI's sale offices and agents abroad from 5 September.

The surcharge ranges from Bt 300 per trip, or Bt 600 per a round trip, for all domestic routes--from Bt 200 per trip previously--to US$25 (about Bt 1,000) per trip on all Asian and Middle Eastern routes--from US$20 (about Bt 800)--and US$50 (about Bt 2,000) per trip on Australia's, New Zealand's and all other inter-continental routes--from US$35 (about Bt 1,400) previously. 

Mr. Somchainuk promised that the national airline would reduce the additional surcharge once the global oil situation returns to normal.

--TNA 2005-08-20

<{POST_SNAPBACK}>

wouldn't fly thai airways if you paid me , the highest airline period . they dont even work with you

[Thanh-BKK]

Hello

In Germany, roughly five years ago...... Regular petrol (91) priced at 2.05 DM, of which (petrol stations posted it at their pumps!) 1.45 DM was tax. In that country it works like this:

Price of product (petrol) plus profit for petrol station. Percentage of mineral oil tax on that sum. And on top of that a 16 % VAT on that sum! So you end up paying tax on taxes - VAT on mineral oil tax. No wonder the price is astronomical.

Regards.....

Thanh

[Khun Larry]

I don't get it... the US went to war to get cheap oil, the oil companies are making record profits, yet oil prices are going up. 

I don't particularly like being sodomized by the oil companies... they should at least give us a 'reach-around'.

<{POST_SNAPBACK}>

Thanks for putting it in the TV vernacular.

[Martin]

Personnally, I believe that it would be best if gasoline and fuel oil taxes were INCREASED all round.

If there isn't a global movement to use oil and its products and substitutes much more efficiently, future generations are going to find life a lot worse than it otherwise would be. (It will be worse anyway, but we shouldn't act to make it even worse for them.)

But people don't make any changes until they are hit in the pocket.

So the government should make us pay a lot more for oil etc and use the money for projects such as ensuring adequate water supplies by building new reservoirs.

Edited August 23, 2005 by Martin