Thai Economy NewsThai Industry NewsThai Law, Visa & Regulations NewsThai Stocks NewsThailand Company NewsThailand Energy & Resources

PTT expects investment boost from price float

The energy price restructuring approved by the National Energy Policy Council last week, which will see prices gradually floated, will benefit PTT and encourage the company to extend gas pipelines and boost the number of NGV stations to ensure sufficient supply for customers.

A source at the Energy Ministry said PTT was expected to post higher revenue after the price increases for natural gas for vehicles by 50 satang per kilogram per month from January 16 until it reaches Bt14.50 per kilo, according to the plan approved by the council last week. This will increase PTT’s annual revenue by Bt15 billion per year.

The current cap on the NGV price of Bt8.50 per kilogram, which is lower than the estimated actual sales cost of between B14 and Bt15 per kilo, has led PTT to delay investing in extending gas pipelines to the Northeast and North, and put off its plan to open additional NGV stations. This has caused insufficient supply for public-transport cars using NGV.

Demand for NGV in August was estimated at 6.9 million kilograms per day, up 2.4 per cent over the same period last year, according to the Energy Business Department. As of August, there were 283,431 NGV vehicles, but just 421 NGV stations nationwide.

Earlier, Termchai Bunnag, PTT executive vice president for natural gas for cars, said PTT’s NGV cost, excluding cost of delivery to stations, was Bt12 per kilogram, and between Bt15 and Bt17 per kilo when delivery costs are included.

PTT has accumulated a loss of Bt20 billion due to the cap on the NGV price at Bt8.50 per kilogram, though the government compensates PTT Bt2 per kilo. The company expects to face losses of Bt10 billion this year from the cap.

The PTT source said the country’s overall fuel-price subsidy had cost Thailand a staggering Bt130 billion this year, according to a PTT study, equivalent to 5 per cent of the national budget. Of the total, the cost of the diesel subsidy is Bt68 billion; liquefied petroleum gas Bt36 billion; losses due to selling NGV lower than cost Bt5 billion; and the price of business opportunities lost from selling fuel lower than cost Bt21 |billion.

Termchai added that PTT planned to establish another 70-80 NGV stations, giving it a total of 500 this year. It plans to extend gas pipelines from Ayutthaya to Nakhon Sawan and from Khon Kaen and Saraburi to Nakhon Ratchasima, with both of these pipeline-extension projects expected to be complete in early 2015.

According to the Land Transport Department, in terms of the number of vehicles using NGV, as of July there were 26,304 trucks, 22,176 public buses, 100,000 passenger cars and 60,000 taxis.

Energy Minister Pichai Narip-thaphan said taxi drivers would receive help from the government in the form of energy credit cards to help ease the burden from the energy-price restructuring. The cards are expected to be available in November or December.

Source: The Nation

ThaiVest Editorial Team

Leave a Reply