PTT to Cap Thai Natural Gas for Vehicles Price @ US$0.21/kg

21 August 2005

TNA. Thailand’s PTT Public Company Limited (PTT) will cap the price of natural gas for vehicles (NGV) at 8.50 baht (US$0.21) per kilogram—or a gasoline gallon equivalent price of US$0.64 (one kg natural gas is approximately equivalent to about .33 gallon US of gasoline)—until the end of this year.

A PTT executive said on Sunday that the company would keep the NGV price unchanged until the year-end in compliance with the government’s policy.

In Thailand, natural gas prices are formulated to one-third of oil prices, with a six-to-nine month lag time.

PTT now is now apparently willing to allow other companies to join in the distribution of NGV in Thailand. PTT owns the pipelines, and it is calculating the returns it might get in such a situation.

As of May 2005, Thailand had only 4,905 natural gas vehicles in the country, according to the International Association for Natural Gas Vehicles.

Nevertheless, assisted by the subsidies, PTT expects CNG will account for up to 10% of all fuel used in the country’s transportation sector within five years. That figure is currently less than 0.5% of all fuel used for transportation. (Earlier post.)