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[webfact]

Ministry of Energy: NGV price rise in line with actual cost

BANGKOK, 4 February 2015 (NNT)-The Ministry of Energy has insisted that it will gradually raise the price of NGV to reflect its true cost of production.

Following the public transport sector's’ call for higher fares after the price of NGV has increased, Deputy Energy Minister Praipol Kumsap, said the hike is in line with the NGV's actual cost of production.

The price of NGV has increased by another 50 satang, to 10 baht per kilogram. The Bangkok Mass Transit Authority is also asking for permission to raise its fare from 8 to 11 baht. The higher gas price has also prompted taxi drivers to follow suit.

According to the Ministry, it costs as much as 14-15 baht to produce a kilogram of NGV. Even though its price is expected to rise further, it will still be cheaper than most other types of fuel.

The excise tax will not be imposed at this timer in order to keep the cost of living affordable for Thais. The Ministry of Transport will look into the requests whether public transportation fares should be increased.

Deputy Energy Minister Praipol Kumsap has assured that the government will help those with lower income cope with the higher traveling costs.


-- NNT 2015-02-04

[Mango Bob]

If you raise the price of NGV and LPG you have to let the transportation sector who use these fuel also raise their prices to make a decent living. It's only good common sense.

[canopus1969]

Excellent, subsidies are wasteful and in the long tern do more damage than good.

[martin81]

Well public transport companies did not lower their fares when they switched fuel from diesel to CNG. They just took the extra profit from cheap CNG.

So why should they be allowed to raise fares now?

[oztaurus]

.... and of course since PTT has a monopoly on CNG we can implicitly trust the integrity and transparency of the accounts which they presented to the government to justify their increased costs,

"So are they all, all honorable men, — "

Julius Caesar. Act III Scene II

[billphillips]

According to Mr Google a car that runs on gas can cover around 20 to 25km per kilo. Assuming a busy taxi covers 400 km a day that will add around 8 to 10 baht a day to the running costs.

Hardly worth all of the fuss just after an increase in taxi fares. Am I missing something?

Edited February 4, 2015 by billphillips

[welshissan]

My wife runs an NGV fuelled Mitsubishi Lancer, obviously with E20 as well, but only gets about 140-160km's with a 10 kilo tank. Not much really and NGV stations are like rocking horse sh!t up here in Issan!

[marinediscoking]

Where is all the outrage over this scheme? Shouldn't the PM face impeachment? NGV, LPG and diesel substitutes are bankrupting the government, this is a another populous policy and a clear case of dereliction of duty! How long has this been going on?

[chainarong]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

.... and of course since PTT has a monopoly on CNG we can implicitly trust the integrity and transparency of the accounts which they presented to the government to justify their increased costs,

"So are they all, all honorable men, — "

Julius Caesar. Act III Scene II

You ask a good question in Act III scene II.

[chainarong]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Where is all the outrage over this scheme? Shouldn't the PM face impeachment? NGV, LPG and diesel substitutes are bankrupting the government, this is a another populous policy and a clear case of dereliction of duty! How long has this been going on?

Thaksin subsidized the petroleum sector, ask any long term expat or even Thaksin what actually happened.

[monkeycountry]

.... and of course since PTT has a monopoly on CNG we can implicitly trust the integrity and transparency of the accounts which they presented to the government to justify their increased costs,

"So are they all, all honorable men, — "

Julius Caesar. Act III Scene II

Who do you think runs PTT?

It might surprise you to learn that The Ministry of Finance holds 51% of the shares, which effectively means the Thai government runs PTT. Submitting false accounts to oneself obviously makes little sense.

[marinediscoking]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Where is all the outrage over this scheme? Shouldn't the PM face impeachment? NGV, LPG and diesel substitutes are bankrupting the government, this is a another populous policy and a clear case of dereliction of duty! How long has this been going on?

Thaksin subsidized the petroleum sector, ask any long term expat or even Thaksin what actually happened.

According to the asiancorrespondant and The Nation:

Diesel subsidies have led to a loss of over Bt100 billion in annual revenue. In three years, the amount has risen to Bt300 billion. Combined with LPG subsidies, that ran up to Bt500 billion.

This scheme was setup by the Abisit government. Sounds very close to the rice loss numbers.

I am not sure if I qualify as a long term expat but I have been living here since 2001 and operating a small business since 2003. I would however appreciate Thaksin's contact information though.

[monkeycountry]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Where is all the outrage over this scheme? Shouldn't the PM face impeachment? NGV, LPG and diesel substitutes are bankrupting the government, this is a another populous policy and a clear case of dereliction of duty! How long has this been going on?

Thaksin subsidized the petroleum sector, ask any long term expat or even Thaksin what actually happened.

According to the asiancorrespondant and The Nation:

Diesel subsidies have led to a loss of over Bt100 billion in annual revenue. In three years, the amount has risen to Bt300 billion. Combined with LPG subsidies, that ran up to Bt500 billion.

This scheme was setup by the Abisit government. Sounds very close to the rice loss numbers.

I am not sure if I qualify as a long term expat but I have been living here since 2001 and operating a small business since 2003. I would however appreciate Thaksin's contact information though.

The above numbers are wrong, but even if they were not, all those subsidies are funded by PTT and the oil fund, which is largely funded by gasoline users, not so much the government. In other words, gasoline is kept artificially exensive to pay for artificially cheap diesel. Depending on the type of natural gas (NGV, LPG etc., the subsidy is either paid for by PTT or by the mentioned oil fund.

In short, the government is taking money from gasoline car owners and PTT shareholders (50/50 government/private) and distributing it to everyone as public transport and general goods in stores (which everyone needs) depends mainly on diesel and gas.

[marinediscoking]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Where is all the outrage over this scheme? Shouldn't the PM face impeachment? NGV, LPG and diesel substitutes are bankrupting the government, this is a another populous policy and a clear case of dereliction of duty! How long has this been going on?

Thaksin subsidized the petroleum sector, ask any long term expat or even Thaksin what actually happened.

According to the asiancorrespondant and The Nation:

Diesel subsidies have led to a loss of over Bt100 billion in annual revenue. In three years, the amount has risen to Bt300 billion. Combined with LPG subsidies, that ran up to Bt500 billion.

This scheme was setup by the Abisit government. Sounds very close to the rice loss numbers.

I am not sure if I qualify as a long term expat but I have been living here since 2001 and operating a small business since 2003. I would however appreciate Thaksin's contact information though.

The above numbers are wrong, but even if they were not, all those subsidies are funded by PTT and the oil fund, which is largely funded by gasoline users, not so much the government. In other words, gasoline is kept artificially exensive to pay for artificially cheap diesel. Depending on the type of natural gas (NGV, LPG etc., the subsidy is either paid for by PTT or by the mentioned oil fund.

In short, the government is taking money from gasoline car owners and PTT shareholders (50/50 government/private) and distributing it to everyone as public transport and general goods in stores (which everyone needs) depends mainly on diesel and gas.

According again to the nation diesel, gasohol NGV and LPG are all subsidized. See the thrid paragraph:

"Energy prices reform must be carefully considered. The previous governments have turned energy policies into populist policies. Subsidising diesel and LPG with the Oil Fund finances does not save the country’s expenses, but raise the country’s burden. Diesel subsidies have led to a loss of over Bt100 billion in annual revenue. In three years, the amount has risen to Bt300 billion. Combined with LPG subsidies, that ran up to Bt500 billion. Some parties will need to shoulder the cost if the subsidies continue," PIyasvasti said at a conference on "energy reform for sustainability".

Iraq produces 3 million barrels of oil per day. In the past two weeks, Islamist militants swept through large swaths of northern and western Iraq. According to the UN, more than 1,000 people - at least three quarters of them civilians - were killed this month.

Piyasvasti also insisted that Thailand still needs the Oil Fund, to stabilise energy prices. Thanks to the Oil Fund, alternative fuels like ethanol are sold at a subsidised price to make gasohol products more attractive to motorists. Meanwhile, Thailand’s energy imports will only increase in the future.

The Oil Fund should not be dissolved and it should continue with its role on energy price stabilisation and alternative energy promotion, he said. The energy expert also agreed that the prices of LPG/NGV as well as diesel should be adjusted upward.

The National Council for Peace and Order (NEPO) has exercised its power to keep diesel at Bt29.85 per litre.

Meanwhile, today, Finance Permanent Secretary Rungson Sriworasat announced that the NCPO today approved to extend excise tax waiver on diesel by another month, to the end of July, to maintain the pump price below Bt30 per litre.

Rungson noted that oil prices have been escalating on conflicts in Iraq. He urged all to cut down their consumption as fuel prices will eventually move along side with global levels.

Pailin Chuchottaworn, president and CEO of PTT, said that fighting in Iraq could also disrupt oil transportation in nearby countries like Iran and Saudi Arabia.

If the conflicts are prolonged, this could lead to a spike in oil prices, he said.

http://www.nationmultimedia.com/business/Fuel-subsidies-must-be-short-term-Piyasvasti-30237034.html

[billphillips]

My wife runs an NGV fuelled Mitsubishi Lancer, obviously with E20 as well, but only gets about 140-160km's with a 10 kilo tank. Not much really and NGV stations are like rocking horse sh!t up here in Issan!

Thanks for sharing your first hand experience. Based on that info .....

So now our very busy, hypothetical, 400km a day taxi is facing a cost increase of ฿13 per day.

I still don't understand what all of the fuss is about. I don't know, or can calculate, how much 400km a day would produce in fares but at least 200km should be with a fare paying passenger, thus producing around ฿2000 at the lower rates. The recent increase in fares amounts to more than ฿200 of that. I should think that being courteous, pleasant, helpful and having a regular shower would produce at least one tip of ฿20 a day on average thus showing a nett profit of ฿7 per day.

Am I missing something?