Chart, oil net imports : recovery, but at lower levels

Yes. This is a Green Shoot. And as Green Shoot Amateur and hunter, I know when I see one.

Here is my beloved indicator : oil.

Oil consumption seen through the prism of imports… more precisely net imports (imports minus exports), because Thailand produces and exports oil too.

Why oil (as the first source of energy) is an important indicator ? Because, without making bad jokes, it’s the motor of the economy. We hate, we love it, whatever, this is a fact and we have to deal with it.

The EPPO (Energy Policy and Planning Office, Ministry of Energy) has updated the figures for september (table 2.1-5, and 2.1-4).

Let’s start with imports, volume and amount.

But as I said, let’s go deeper with net imports (we have to remove exports).

There is a clear hike in september : 616 000 barrels per day in september. But we can see that we are clearly under the levels of 2007 and (mid) 2008. During those years, we hit several months 750 000 barrels per day.

Has Thailand increased its energy efficiency between 2007 and 2009 ? Of course not. Consumption went down because of the crisis (plural… we had many in Thailand : political crisis, then inflation crisis, then the Big Global Crisis etc.)

Same datas, but with the % of change year on year (we compare for instance september 2009 with september 2008 etc.)

It’s even clearer… We went rock bottom last winter, during the Great Panic… and since then we start to go up. Slowly but surely (eventhough I insist, we are at lower levels than before).

With the base effect starting in november… the % y-o-y are going to increase a lot.

So shall we rejoyce ? I doubt it. Because oil (energy) is the biggest weakness of Asia.

Remember Thailand in july 2008… Not so long ago… We were on the verge of catastrophy with oil prices at all time highs… Yeah I know people have short memory…

This collective terror will come back. Later… We had it before in the West (70’s)… It will be a first for Asia…

And one thing is sure : they are not prepared for it.

Abhisit opens the subsidies Lala circus : 48 billions THB worth of fossil fuels to be burned

Done. Abhisit has totally embraced the subsidy logic. The same that Thaksin and Samak used before. For that matter, the current PM is as short sighted as his predecessors… as populist… as full of dirty tricks from the political backroom… as weak… as -let’s speak frankly- dumb as them.

Does Abhisit think seriously that this costly package will change the economy ? Will make the people to love him ? Will allow him to win an election (which he NEVER did) ? Sure he does. But he’s wrong.

The economic crisis will be his Nemesis. Burning cash to burn fossil fuels and meanwhile speaking about “recovery” is just a pathetic move from a meek politician, afraid of his own shadow, who is falling day after day deep into an ocean of ridicule (read here for his latest grotesque mistake).

The government yesterday approved a Bt48-billion energy-subsidy package to lower retail prices of diesel and other types of energy in a bid to win wider public support. [...]

The move is aimed at helping ease people’s cost-of-living burden and fuel economic activity during this critical juncture, it said.

-The price of B5 biodiesel will also be reduced by 81 satang a litre, in order to promote the use of this alternative fuel, costing the government Bt421 million a month.

-Second, the government will spend Bt740 million a month over the next year to subsidise LPG, which is imported at Bt25.73 a kilogram but resold domestically at only Bt18.13.

-Third, the government will spend Bt300 million a month to subsidise CNG for another year.

-Fourth, the government will spend Bt1.2 billion over four months to subsidise 30,000 taxis that want to convert to running on NGV. Altogether, the four measures will cost the government Bt27.5 billion.

-Fifth, the government will use Bt10 billion to subsidise the FT surcharge on electric bills.

The government already owes Bt20 billion to Egat for keeping the FT below the agency’s cost, and the year’s extension will add Bt10 billion to the state’s outstanding debt to it. (Nation)

Abhisit = all the previous thai Prime Ministers : let’s subsidize diesel !

Christmas in August Part 2 (for the first part, read here).

Motorists will again enjoy cheaper diesel by two baht a litre starting next week, after Prime Minister Abhisit Vejjajiva demanded that the state Oil Fund subsidise prices. [...]

The result, said an Energy Ministry official who declined to be named, was that the ministry on Monday would seek approval to suspend the Oil Fund levy of 1.70 baht a litre collected on diesel. Approval is needed from the National Energy Policy Council (NEPC), which Mr Abhisit chairs.

An additional subsidy to oil traders of 0.30 baht would bring the pump price down by two baht a litre.

“So all of the money will go to help the Oil Fund to pay part of the price for diesel users as the Oil Fund now has accumulated income of 16.8 billion baht, too little to finance the subsidy,” the official said.

The source added that Mr Korn had resisted cutting the excise tax on fuel.

“He told us that the excise tax can’t be cut because the government’s tax revenue was far lower than the target,” the official said. (Bangkok Post)

This is a show case. A show case of inane economic policy. And a striking example of “political copycat”.

-Abhisit in january decided to scrap the excise tax on diesel… Talk about coherence…

-Abhisit and his buddy Korn, the alleged Finance Minister, prefer a… debt to a lower tax. Pathetic accounting trick…

-people should remember that SOMEONE WILL PAY. There is no free lunch. Never. A subsidy is a fix of “feel good dope”. But YOU WILL PAY.

-Pushing people to consume more diesel is the bottom of economic thinking… When Thailand has already a poor energy efficiency…

-and let’s remember that Thaksin did exactly the same absurdity, from 2004 to 2005. The result of this “folie” was a hole of 100 billions THB ! And this is why the Oil Fund was created (a small tax on each liter sold, to pay back the debt).

-same story with Samak (you remember ?) last year… Subsidies for gasoline and diesel. On a large scale. A festival.

-it’s easy to see the short term obsession behind such policy : Abhisit is in full “populist gear mode”, spreading money around. The guy is terrified by his own shadow.

So, like I wrote just after the “election” of Abhisit… Change with Abhisit ? Yes We Can(‘t).

UPDATE
I’m wondering if Korn plays stupid on purpose ? … On friday he’s okay to subsidize diesel… and sunday he’s willing to increase taxes on cars to promote “alternative energy”.

The Ministry of Finance is eyeing to increase motor vehicle taxes to urge motorists to use alternative energy.

Finance Minister Korn Chatikavanij said on Sunday that he had a meeting with Industry Minister Charnchai Chairungrueng and Energy Minister Wannarat Channukul to discuss the tax structure for the automotive industry and the energy consumption at the moment.

Because of the rising fuel prices, the government wanted motorists to turn to alternative energy, he said. (Bangkok Post)

Oil : Abhisit extends the subsidy to end… the subsidy

Mid-january, I’ve asked : “who is going to invent the subsidy for intelligence ?”

At that time, our dashing Prime Minister was busy making gifts (while announcing the “recovery” of the thai economy) and he created the subsidy to end a subsidy.

The state Oil Fund will be required to spend around three billion baht to subsidise fuel prices after excise tax on fuel resumes in February, according to Energy Minister Wannarat Charnnukul.

Five months later… well… the name of the game is still the same… eventhough the government is totally broke and there is no sign of recovery. And oil prices are going up again…

In those conditions, Abhisit wouldn’t dare to change the recipe for disaster… As for the consequences, mai pen rai… just multiply the figures by… five !

The State Oil Fund (SOF) will extend its price subsidies for retail fuels until the end of September at a cost of 16 billion baht, to curb the impact of soaring prices on motorists’ pockets, says Energy Minister Wannarat Channukul. (Bangkok Post)

Who will pay ? That’s irrelevant in Abhisit’s psyche. Enough to borrow some money (the government is still running after a 400 billions THB loan or 1 trillion or more, nobody knows).

Furthermore… 2 weeks ago the timescale they were thinking about was one month. Now that oil prices are increasing, and that the government is in deep shit with mega corruption issues (the “leasing buses” scandal) and therefore deep political troubles (the Newin faction wants the honey pot… and Abhisit owns them his position…)… so the government is trapped.

Abhisit was a clown. Definitely. Now he’s a loser. Definitely.

I’m wondering which is worse.

Gasoline prices : more non sense coming from Abhisit

After the “I give you 20 billions THB” (special allowance to 9 millions people) and a few weeks later “I take back 20 billions THB” (increase of excise taxes)… Abhisit is diving deeper into the Ridicule Ocean.

With a striking concept :

-the tax increase that you won’t feel… for one month

Bravo ! Let’s applaud our dashing (alleged) Prime Minister.

The Energy Ministry on Thursday has reduced petrol and diesel oil contribution to the Oil Fund by Bt2 per litre, with immediate effect, so that the higher excise taxes would not affect retail prices.

Energy Minister Wannarat Charn-nukul however said that the contribution cut would remain for only one month, and after that the retail prices will be gradually increased, presumably 60-70 satang for each increase. He added that if oil prices are on the upward trend after a month, the ministry will reconsider if the subsidy period would be longer than 1 month. (Nation)

I remind you that the Oil Fund was created after the huge subsidy decided by Thaksin in 2004… This little joke costed 100 billions THB ! Since then, a small “contribution” is taken on every liter of gasoline sold, to pay back the debt.

But with years, this Oil Fund became… itself a subsidy tool, like a cushion ! That’s the irony.

Therefore, the government can increase excise tax on gasoline, but meanwhile cut the contribution to the Oil Fund. Eventually, it’s of course exatly the same ! The hike is just replaced (for sometime) by debt.

Change with Abhisit ? Do you remember the motto ? Obama ? The Black Jesus and the Green Shoots and all the circus they’ve served us ?

Well… Now you know : Abhisit is following exactly the same policy -as far as energy is concerned- than Thaksin, Surayud (Junta), Samak and Somchai… all previous PM.

Subsidies. Subsidies. Hidden subsidies.

The issue is just too explosive… they are trapped.

Energy is the weak point of the country (read here and there). More than ever.

Chart, prices of gasoline, diesel : from 2006 to march 2009

The last update of my chart about prices of fuels was… in november.

So it’s time to brush off the… dust.

(note : the red and yellow lines are the important ones : gasoline 91 and diesel)

Hum… a full blown recession… and we are going north again… Not a good omen.

You probably forgot… But last summer we were very close from the cliff... The Oil Bubble created a real panic and some damages… and forced all the governments in Asia to subsidize like crazy fuels prices… The issue, along with inflation food prices, was just too explosive.

Right now, oil prices are low again (relatively), so everything look quiet. But energy is still the real Achilles Hell of Asia… Anyway… enjoy the low prices.

(those prices are PTT prices, in Bangkok. High volatility… Sometimes, PTT changes its prices every week. Methodology : 1 change = 1 point, and I put the date for the first change of each month. It gives you a gauge of the volatility. You can see that last summer, PTT changed its prices almost on a daily basis… it was the Great Panic).

Chart, oil imports : drop of 11,7 % in january

It’s the never ending party in Thailand. After a drop of 30 % in november… the imports of oil increased in december and in january… but are still lower (-9 %) compared to january 2008, at 816 000 barrels per day (829 000 bpd in december).

Hopefully prices of oil crashed… in january the average was 44,27 USD… the 135 USD per barrel last july seem so far away, isn’t it ?

But because Thailand exports oil too, we need to have a look at the net imports (imports minus exports).

We were at 575 000 barrels per day in january… a decrease of 11,7 % compared to january 2008.

Is the recession start to take a hit on the oil consumption ? I will believe It when I will see it. The car obsession is so strong in Thailand, that I’m sure it’s going to be a very lagging recession indicator !

Anyway, there will be a sign : diesel.

With the recession, the crash of trade… diesel consumption will go down.

(source EPPO)

The first courageous decision from Abhisit : return of taxes on diesel

At last ! It took long time, and many people within the government didn’t agree… but at last they have decided to scrap the diesel subsidy (part of the Samak Plan) that was decided last july.

At last.

With falling oil prices, this subsidy became totally obscene. Nonsensical.

The Cabinet on Wednesday gave the greenlight to the increase of excise taxes on petrol and diesel, to encourage the public to save energy.

The decision will take effect on Feb 1.

Among the six energy-saving measures approved by the Samak government, the Abhisit government decided to scrap the excise tax cut. As a result, the excise taxes on all fuel products would return to the pre-July 2008 level.

Jesus… Nation is so stupid… What a bunch of brainless people.

Samak Plan was absolutly not to save energy ! It was to cushion the inflation of prices ! And it leaded to… an increase of oil consumption (look the chart).

Excise taxes on petrol would reach the limit of Bt5 per litre from Bt3.685-Bt4.685, while that of diesel would be Bt3.6-Bt4 per litre from Bt0.005-Bt2.405. Meanwhile, the tax on gasohol E85 is cut to Bt0.75 from pre-July level at Bt2.5795, while that of gasohol E10 and E20 is raised to Bt3.317. Biodiesel B5’s tax is maintained at Bt2.19.

Finance Minister Korn Chatikavanij said that these measures would promote alternative energy and agricultural products as well as reduce crude oil imports.

“The government should earn additionally Bt1.572 billion from these measures,” he said. (Nation)

This guy is a pathetic liar. It will bring much more money than 1,5 billion… Because it costed much more. It has even been a disaster for public finances (read my article).

And they need badly that extra money to finance, for instance, the stupid 2000 THB allowance for every living organisms.

UPDATE
But of course, I forgot that they wanted to create a subsidy for the end of the subsidy (read here).

It is now confirmed.

Energy Minister Wannarat Charn-nukul, as chairman of the National Energy Policy Committee, said the committee resolved on Thursday to help delay the full increase in pump prices to alleviate consumers’ burden. Meanwhile, pump prices could be raised by no more than Bt1.50 per litre in the subsequent round.

“It should take about two months for the pump prices to be increased to match the higher excise taxes,” he said, adding that the Oil Fund would need to spend about Bt3.5 to Bt4 billion to subsidise the prices. (Nation)

All this circus to “save” 2 months… What a bunch of pathetic bozos.

Chart, oil : imports drop by 30 % in november

After a small orgy of oil imports from august to october (due to the subsidies and the drop of oil price)… we can see a dramatic downturn in november with a drop of 30 % year on year (from 809 000 barrels per day in november 2007 to 565 000).

And compared to the previous month (october 2008), the drop is 32 %.

Something is clearly happening…

But because Thailand exports oil too, we need to have a look at the net imports (imports minus exports) in order to really gauge the demand.

It’s even worse with a drop of 39 % (from 542 000 bpd in november 2007 to 328 000).

There is a good point though : the amount of the oil bill is falling. So it’s good for the trade balance.

(source EPPO)

Fuels : they will subsidize the end… of subsidies

Let’s go deeper into the Rabbit Hole of the Wonderland with a new thai invention : how to subsidize the end of a subsidy.

The state Oil Fund will be required to spend around three billion baht to subsidise fuel prices after excise tax on fuel resumes in February, according to Energy Minister Wannarat Charnnukul.

The new subsidy programme will help motorists continue to enjoy low fuel prices even though the former government’s populist measures that waived excise taxes for gasohol and diesel since July were to finish by the end of January.

The Samak Sundaravej administration introduced the measure, aimed at containing the cost of living, during the oil price spike.

From Feb 1, the retail prices of gasohol 95 and gasohol 91 will rise by 3.30 baht per litre. Diesel will cost an extra 2.30 baht and diesel B5, a mixture of biofuel with diesel, an extra 2.10 baht per litre.

The precise amount of the new subsidy has yet to be established but it will cover only part of these costs from the return of excise taxes. (Bangkok Post)

Prime Minister Abhisit, busy loosing face by relocating the Asean Summit in Hua Hin, doesn’t want to displease Somchai at the wheels… So a little gift won’t hurt…

And probably after, he will find a subsidy for the end of the subsidy of the subsidy.

We are still waiting for a subsidy for intelligence.

But I guess, it would cost way too much.

Chart, prices of gasoline, diesel : the great Niagara Falls

I know you don’t give a rat shit about prices of fuels right now, due to the current political situation. And I do know that you’re all waiting for… the Coup.

But I wanted to talk about a good news, at last.

Look at this amazing Niagara Falls ! That’ s the good point with PTT : they follow the world prices of crude oil, like a mother is following her child. We can’t say the same in Europe, where oils companies… take much longer to adjust downward their prices…

Peak was reached on july 3 with 1 liter of diesel at 44,24 THB (21,04 THB today…) !

Other point to remember : end of july, the Samak gvt gave a tax cuts on diesel and gasohol (for 6 months).

Anyway. It’s a great relief for common people. Now, we could argue… there are bad points : lower prices = higher consumption = higher imports = higher trade deficit…

But I don’t want to spoil your day.