PTT not solely to blame for 'monopolising ' NGV market
PTT has been criticised for monopolising the market for natural gas for vehicles. That criticism will stay for some time. Though there are some small players, PTT maintains control because of unclear rules and regulations.
The criticism has flared up as NGV demand has zoomed but the number of gas stations is growing at a snail’s pace.
Energy Minister Arak Chonlatanon said recently that he supported the liberalisation of the NGV retail business by encouraging companies to jump into the arena, which would help expand the number and coverage of NGV stations nationwide to benefit customers. Long queues at NGV stations in the provinces are a common sight.
PTT is the sole NGV distributor. It is also the biggest NGV retailer, through 475 stations countrywide, of which 110 are located along its gas pipelines, 20 are master stations and the rest are far from the pipelines. Other companies have already jumped into the business with a combined 80 stations.
A ministry source said 100 companies were applying for permission from PTT to open NGV stations along its pipeline routes but PTT has stalled them pending the restructuring of the gas transmission fee by the Energy Regulatory Commission (ERC).
The source said most of the applicants were truck-fleet operators that want to ensure that their vehicles have enough NGV.
Truck and public bus operators account for 60 per cent of NGV consumption in Thailand.
Since PTT has the final say on who can operate the stations, the industry is not as liberalised as expected.
Besides market share, PTT is also concerned about the NGV price. Currently, it is distributing gas at below cost, resulting in its NGV business accruing losses of Bt20 billion. PTT is selling NGV at Bt10.50 per kilogram, recently up from Bt8.50, versus the cost of Bt14-Bt15.
Failure to allow it to raise the price results in delays in the opening of stations, as that would only increase the sales volume and widen the loss. But any government faces attacks when attempting to raise prices.NGV consumption in Thailand is about 7,800 tonnes per day. , up from 6,700.?? When??
When Pichai Naripthaphan was energy minister, the ERC passed a resolution to raise the NGV price by 50 satang per kilogram per month to Bt14.50, but the resolution was cancelled by the ministry under Arak.
Bombarded with accusations of favouring PTT, Arak told the company to hire Chulalongkorn University’s Energy Research Institute to conduct a complete study on the NGV price structure. He hoped that the non-partisan opinion would support a price hike.
Arak is waiting for the Energy Research Institute to calculate a formula to consider when setting the NGV price.
The institute has already presented four alternatives for Arak but he is also waiting for the ERC to send him the result of the regulator’s study of the appropriate gas transmission fee.
Only then can the industry be fully liberalised.
Should the study recommend a price hike, PTT would be encouraged to open more stations and grant licences to more retailers.
This should please gas users, although they will have to face the actual cost.
