| BANGKOK, July 25
BANGKOK, July 25 Thailand's military government
will delay finalising details of closely watched energy reform,
a military official said on Friday, which could compound
uncertainty about the country's oil and gas sector.
The reform, which was due to be finalised by the end of
July, is expected to include plans to improve the position of
the State Oil Fund and restructure domestic fuel prices from a
highly regulated system to a market-based one.
The plan was submitted to General Prayuth Chan-Ocha, the
army chief who seized power in a May 22 coup, for consideration,
but was sent back for another review, Air Chief Marshal Prajin
Juntong, deputy head of the military council, told reporters.
Prajin said the junta's economic team would hold a public
hearing on the reform in August before resubmitting the plan to
the junta leader for approval.
"There's some unclear information about production and
supply from domestic and foreign sources," Prajin said adding
that the priorities of the reform were how to restructure
cooking gas and oil prices, the Oil Fund and fuel subsidies.
Domestic energy prices in Thailand have been distorted by
various populist policies introduced by previous governments
through the Oil Fund.
Previous attempts to restructure energy prices failed
because of strong public opposition and the need for politicians
to maintain their voting bases.
Since it seized power, the military has discussed with
several energy-related officials how to reform the sector and
all parties have agreed that fuel prices should be restructured
in the interest of fairness, officials have said.
Analysts say Thai oil and gas companies are facing
uncertainty because the reforms may hurt their earnings.
State-controlled PTT Pcl, the country's sole gas
supplier, has to import liquefied petroleum gas (LPG) at the
global price and sell it at a fixed price of $333 a tonne, while
the Oil Fund has to levy tax on gasoline users to compensate
Prices of LPG for cooking have been raised to 22.63 baht per
kg to reduce the huge subsidy burden carried by the Oil Fund,
but the junta decided to scrap a plan to float LPG prices until
the reform plan is finished.
PTT's gas operations, which accounted for one-fifth of its
2013 operating profit, have suffered from the impact of
subsidies for several years as drivers shifted from costlier oil
Separately, Piyasvasti Amranand, chairman of PTT, said on
Friday its board had approved plans to spin off its gas pipeline
business and sell its stakes in two refineries, Star Petroleum
Refining Co (SPRC) and Bangchak Petroleum.
PTT, which has a monopoly in the gas-pipeline business and
has interests in five of six oil refineries in Thailand, wants
to sell the stakes to reduce public criticism of its monopoly
The company has long planned to dilute its 36 percent
holding in SPRC via a public offering, but the listing has been
delayed for several years as negotiations with oil giant Chevron
Corp, which owns 64 percent of SPRC, foundered over
PTT, which owns 27.22 percent of Bangchak, expected the
stake sales and the spinoff to be completed before Thailand
holds a general election in late 2015, Piyasvasti said.
(Reporting by Khettiya Jittapong; Editing by Robert Birsel)