LPG : price will probably go up in july

PTT (the big thai oil company) starts to warn people : the price of LPG (Liquefied petroleum gas ) will go up in july. For several reasons :

-demand has exploded

-prices of oil continue to rise

-forecasts were wrong : Thailand needs to import much more LPG (local production is not enough)
“Initially, the country is expected to import only 100,000 tons of LPG this year, but the figure has been adjusted to 200,000 tons. Moreover, the country may have to import 800,000 tons of LPG next year. ” (PRD)

-prices on the world market are higher than local. Therefore, this distorsion has created of course… smuggling.

“Mr. Prasert says people have also smuggled LPG in Thailand to other countries because Thailand is selling LPG at a much lower price. ”

Going after cheaper fuels, cheaper alternatives when the regular prices of gasoline and diesel increase, is a good thing.

But people need to understand that cheaper doesn’t mean… to keep the same price for ever. The subsidy temptation is always very strong. But it’s not sustainable. Furthermore, LPG is a sub-product of… oil ! Therefore, its price will have to follow. Eventually.

All fossils energies (oil, LPG, NGV, coal etc.) cost more today, than yesterday. And are likely to cost even more tomorrow.

UPDATE JUNE 30
Shortages of LPG in Bangkok and Pattaya… Read here.

Furthermore, the hike is a certainty now. Should happen this week.