DOEB predicts flat LPG pump stations

The Department of Energy Business (DOEB) forecasts a freeze in the expansion of liquefied petroleum gas (LPG) stations as demand for the fuel in the local transport sector has been gradually shrinking since 2014.

The demand contraction coincides with a decline in vehicles fuelled by petrol and LPG, from 1.17 million in 2016 to 1.083 million in 2017, reported the Land Transport Department.

As of March, the number of vehicles fuelled by petrol and LPG was down to 1.06 million.

Usa Ponglukna, deputy director-general of DOEB, said the number of LPG stations has also decreased from 2,093 locations in 2017 to 2,082 as of March.

But she said the falling numbers of vehicles and stations are expected to bottom out in 2018 to reflect actual market equilibrium.

“Remaining LPG motorists will drive their vehicles until the vehicles’ life cycles end, within the next several years,” Mrs Usa said. “Buyers are unlikely to purchase new petrol or LPG vehicles because energy policymakers have decided to suspend the subsidy programme for LPG in the transport sector.”

Yesterday, the DOEB also reported LPG consumption in the first quarter dropped by 10.8% to 3.4 million tonnes per day.

Furthermore, a contraction was seen in compressed natural gas (CNG) demand, with a 8.3% drop to 6.5 million tonnes per day from January to March.

She said personal vehicles, particularly sedan models, have shifted from using gas as the retail prices have been floated, pushing motorists to return to using petrol and diesel.

Before 2014, when global oil prices were above US$100 per barrel, policymakers maintained the huge subsidy for LPG at $333 per tonne on ex-factory prices. At the time, Saudi Aramco prices were nearly $1,000 per tonne.

CNG was given a huge subsidy to below eight baht per kilogramme, down from the actual production cost of 13-14 baht, encouraging motorists to switch from petrol and diesel to LPG and CNG.

In contrast to other fuels in the first quarter, petrol consumption rose by 4.7% to 30.8 million litres per day, while diesel usage grew by 3.9% to 67 million litres per day.

The DOEB forecasts fuel consumption of all types in 2018 to grow by 4.5% to 156.3 million litres per day from 149.5 million litres last year.

Petrol consumption is expected to grow by 6.2% to 32 million litres per day while diesel usage is projected to increase by 5.1% to 67 million litres.

Jet fuel consumption is projected to rise 3.6% to 19.1 million litres, while bunker oil usage is expected to surge by 4.9% to 6.04 million litres.

LPG consumption for all sectors (transport, household and industry) is expected to increase by 2.4% to 17.4 million tonnes per day.