Thailand latest to lower fuel prices amid protests

BANGKOK/LONDON (Reuters) - Thailand moved on Friday to ease the pain of record high oil by lowering prices, while the British government set out extra measures to help the poor and boost energy efficiency.

Booming oil and energy prices have spawned protests across the world and are creating fiscal and political headaches for governments. In Asia, where many countries subsidize or otherwise control the price of fuels, the issue has become acute.

Thailand was the latest to buckle. The government said on Friday the country's four state-run refineries would sell diesel to bus operators in Bangkok at a discount of 3 baht (9.4 cents) per liter.

The four refineries, all affiliates of Thailand's biggest oil and gas firm PTT PCL, agreed to supply 122 million liters of cheaper diesel per month to bus companies struggling to hold fares down, Energy Minister Poonpirom Liptapanlop said.

The scheme starts on June 1 and is set to run for six months.

"This is a voluntary decision by the four refiners based on their willingness to help ease the people's burden," Poonpirom told reporters after a meeting with the refiners chaired by Prime Minister Samak Sundaravej.

The decision followed a strike by private bus operators on Thursday in Bangkok after a court temporarily blocked their plans to hike fares.

In Britain, households where more than 10 percent of income is spent on energy bills will get special help, including home insulation aid, microgeneration and information sharing, the government announced on Friday.

"These new measures will make homes across the country more energy efficient and give people at risk of fuel poverty a boost where they need it most," said Environment Minister Phil Woolas.

Over the past week or so as oil touched a record $135, Indonesia, Taiwan and Sri Lanka have raised regulated fuel prices, forced into unpopular action by the unsustainable cost of subsidies.

CHINA RATIONING

India is expected to take a decision on raising prices in the next two to three days, with key political leaders expressing a willingness to tackle mounting losses at state oil firms.

But China, which uses nearly three times as much fuel as India, was unlikely to adjust prices until after the Olympics. But shortages there, which started more than a fortnight ago, have hit at least half a dozen Chinese provinces on the east.

Petrol stations in at least three major Chinese coastal cities were rationing diesel, drivers said, causing long queues of trucks and reviving the specter of bigger fuel shortages that could stir discontent.

"I've never seen so many trucks queuing for fuel like this before," said one driver on her way home in southern Beijing.

Concerns about speculative activity grew.

"We suspect that some speculators are buying from our petrol stations cheap and selling to private gas stations or other wholesale users," said an official at refiner Sinopec.

South Korea said it could lower taxes on diesel in an effort to give its transportation and auto makers some breathing space.

"Soaring oil prices are a big concern ... and the government should do something to ease price pressure for those highly dependent on diesel," South Korea's Vice Finance Minister Choi Joong-kyung said in a speech on Friday.

Truck drivers, bus associations and auto manufacturers have all demanded the government lower taxes on diesel, threatening strikes otherwise, or fare hikes which would add further pressure to already high inflation.

In Britain, truck drivers caused road chaos in London this week in a protest to demand government help over rising fuel prices. Across the English Channel, Dutch truckers called on motorists to honk their horns to push for lower fuel taxes.

France has called on the Group of Eight industrialized national to act together to restore oil prices to a more bearable level, warning the fuel price surge threatens economic growth.

French Economy Minister Christine Lagarde, who made the appeal in a letter to her G8 colleagues, said the issue should be discussed at the forthcoming finance ministers meeting in Osaka, Japan.

Americans, known for their love of the open road, are cutting back their consumption. During the week leading up to this weekend's Memorial Day holiday, the traditional start of vacation season, Americans pumped 5.5 percent less gasoline than a year ago as prices marched steadily toward $4 a gallon.

At least one estimate saw crude hitting $200 a barrel, though consumers and oil analysts say speculators could be manipulating the underlying supply and demand picture.

($1=32.49 Baht)