LPG shortages : another symbol of mismanagement

It’s Economy 101. Even Psychology 101. But still too difficult to understand for the thai authorities.

Since a few months, we know that prices of LPG will increase in july. PTT was very clear. But not the government, as usual.

The subsidies cost too much (read here).

In order to avoid hoarding, they refused to gives details (how much, and when exactly).

It was a mistake. Because people can fantasize.

It would have been more efficient to say “LPG prices will increase on july 1, by %”. But such transparency would have created “inflation expectations”, right ? Exactly like with NGV (+41 % announced for end of december).

The government is so terrified that they try to postpone to the very last minute any prices hikes.

And since a few days… well… we have shortages (read testimonies of drivers in Bangkok, on ThaiVisa forum, and in Pattaya).

Because hoarding and probably because of mismanagement of imports.

The Energy Ministry warned dealers on Sunday against hoarding liquefied petroleum gas (LPG), as thousands of taxis had to stop running because of the hoarding.

Permanent Secretary for Energy Pornchai Rujiprapa said he was confident that there would be no LPG shortage in the country but he did not address hoarding for a suspected price rise on Wednesday.

Taxi drivers told passengers that gas stations had shut down on Saturday amidst reports that the price of LPG will be allowed to float as of Wednesday (July 1). They expected the cost to double from 11 baht to 22 baht per litre. (Bangkok Post)

Another disaster, perfect symbol of mismanagement and utter stupidity ! I mean it’s becoming laughable.

There is no point to warn dealers, after the war, with the little fists of the Energy Minister… And there is no point to deny the problem of shortage.

The only solution was to play transparency card, right from the beginning, with full disclosure of all the datas, in order to allow people to anticipate.

But Thailand continues on the Zimbabwe’s path. With a smile.

UPDATE 1
The Commerce Ministry also shows his little fists. Commerce Ministry permanent secretary Siripol Yodmuangcharoen Sunday said he received a report from the Internal Trade Department that some operators had been hoarding the LPG ahead of the price hike.

“Such hoarding is illegal,” Siripol said, “We will take harsh actions against the offenders”. (Nation)

UPDATE 2
The little game continues this morning : “Permanent Secretary for Energy Pornchai Rujiprapa on Monday affirmed that prices of liquefied petroleum gas (LPG) or cooking gas would not be raised by July 1 as many expected, but conceded they would be revised within a month.. (TNA).

Director-General of the Department of Internal Trade says the price of liquefied petroleum gas (LPG) will not decrease on July 1st as the Energy Policy Board has yet called a meeting to discuss the price hike. (PRD)

It’s crystal clear ! They need to organize… a meeting in order to set the date for the increase… πŸ˜‰

UPDATE 3
About one fifth of Bangkok’s taxis had to stay idle Monday after many service stations ran out of liquefied petroleum gas (LPG). “There’s nothing to fill these taxis’ tanks,” Siam Taxi Cooperative president Witoon Naewpanich said. (Nation)

9 Responses to “LPG shortages : another symbol of mismanagement”


  1. 1 thaichris 30 June 2008 at 9:43 am

    Watch todays news. LPG might go up to 30 Bath (+200%). And keep in mind: LPG is also used for cooking. Everybody will be suffering.

    And I don’t think the 500 Batch from election day will cover these extra cost.

  2. 2 thaicrisis 30 June 2008 at 9:53 am

    That’s the whole point thaichris : we don’t know, because the authorities refuse to tell us !

    It’s utterly insane. People are waiting, everybody know that the price will go up, but… no details. And even the lunatic Energy Minister still denies.

    Result : rumors of +200 % (which is totally ridiculous, even if I’m a believer of free market). It just can’t happen.

    As for the LPG for cooking… low prices will be kept (dual pricing).

    To hit the thais who are driving, okay, no choice, but to hit the thais who are eating… in the current situation (eco and politics)… it’s just impossible. πŸ˜‰

  3. 3 thaichris 30 June 2008 at 11:21 am

    If the difference between LPG for cooking and LPG for driving will be too big, they will use LPG for cooking to fill the tuk-tuk and taxi tanks. This, by the way, was the original idea 25 years ago. They just took the cooking gas cylinder and put them under the tuk-tuk.

    It will also last in horrible accidents – who cares …

    Governement lost control. And Samak is in Bejing. Maybee he is buing fertilizer. It’s his major concern in these days.

  4. 4 thaicrisis 30 June 2008 at 11:59 am

    Of course. We all know that nothing, even corpses, can stop an imaginative thai fighting to save his purchasing power.
    πŸ˜‰ !

    But seriously, they need to keep the dual pricing.

    LPG for transports is killing them (high subsidy and very high demand) and LPG for cooking is just too important and political (even more than the drivers population).

    No choice I believe.

    It’s enough to see the funny denials of the authorities (now they deny… the hike on july 1… I mean they are so desesperate that they believe that a few days more is going to… to do what by the way ? They don’t even know ! ) πŸ˜‰

  5. 5 fall 30 June 2008 at 3:20 pm

    If the difference between LPG for cooking and LPG for driving will be too big, they will use LPG for cooking to fill the tuk-tuk and taxi tanks.
    Touche, my dear, touche.
    It’s the problem I fear would arise when start using cooking gas as fuel. LPG should not be use as fuel in the first place. If the government is rational, they should abort LPG as fuel. But that would mean taking political hit, hard.

    Supply, demand, and substitute product. With high global LPG price, continuing subsidy would only prolong the inevitable.

  6. 6 absolutelybangkok 1 July 2008 at 5:20 am

    Regarding your first comment thaicrisis: The days you got 500 baht per head per vote are long gone. This year I heard of 100-200 baht. Yes, elections are won that cheap today.

  7. 7 ThaiCrisis 1 July 2008 at 5:23 am

    [don’t confuse “thaicrisis” with “thaichris” πŸ˜‰ ]

    On the other hand, we might need to factor in inflation.

    Anyway, I guess the supreme law of offer-demand shall apply for vote buying too.

  8. 8 ThaiCrisis 1 July 2008 at 6:02 pm

    Bingo.

    “Local residents in many provinces, fearing a fuel shortage as the price of LPG gas is predicted to increase, flock to fill up their tanks.

    Meanwhile, many Pattani residents, as a means of reducing their burden, turn to using cooking gas in their LPG-engine-equipped cars despite safety risks.”
    http://www.thailandoutlook.tv/toc/ViewData.aspx?DataID=1007987
    πŸ˜‰


  1. 1 BKK News Feed Archive - Q2/08 Trackback on 1 July 2008 at 2:39 am

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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