Changes to Oil Fund levies raise cost of subsidies
As a result of the government's changes to levies for the Oil Fund, the state is facing a higher subsidy bill than expected, at Bt3.8 billion, as motorists have switched from gasohol to non-ethanol petrol.
Viraphol Jirapraditkul, director-general of the Energy Business Department, said inventory levels of petrol at filling stations had mostly been topped up and 80 per cent of the subsidy compensation owed had been paid.
Initial compensation was estimated at Bt3.622 billion, of which Bt3.05 billion was for oil traders, while petrol stations in Bangkok were estimated to receive Bt46 million, upcountry stations getting Bt504 million, and oil jobbers Bt22 million.
However, the state now expects to pay Bt3.8 billion, which is Bt200 million more than expected. The Energy Fund Administration Institution will pay the compensation immediately as agreed at a recent meeting of the Energy Policy and Planning Office (Eppo).
Viraphol said the department had informed Eppo of the problems resulting from the price of 91-octane petrol becoming the same as gasohol 95, that is, Bt36.57 per litre. Gasohol usage has decreased by 1 million litres per day, to 11 million litres. In addition, the department has been informed by some oil traders that their sales of gasohol 95 are down by 20-30 per cent.
Many gasohol 95 users have switched to gasohol 91, which is now Bt3.03 per litre cheaper. At the same time, many users of gasohol 91 have switched to non-ethanol 91-octane petrol, because the price is the same and many believe it provides more economical fuel consumption. As a result, gasohol 95 usage is falling continually.
Accordingly, the department has suggested that Eppo solve the problem by pricing gasohol 95 about Bt1-Bt1.50 per litre lower than 91-octane petrol.
Gasohol 91 usage has fallen 5-10 per cent since the levy was reduced by Bt7.17 per litre. Oil traders believe that sales will return to normal soon, because Eppo has agreed to reduce the levy on gasohol 91 for the Oil Fund. As a result, the price of gasohol 91 will soon be Bt3.03 per litre lower than 91-octane non-ethanol petrol. Consumers should gradually return to gasohol 91 and sales are expected to return to their former levels within a week or two.
A source from the Energy Ministry said oil traders that benefited from the reduction of the Oil Fund levy on non-ethanol petrol were mostly those that sold that type of fuel, such as Esso and Caltex, while Bangchak Petroleum and PTT were adversely affected from the drop in gasohol sales.
