Thailand's state supplier of natural gas for vehicles (NGV) has agreed to offer other oil retailers a higher marketing margin to encourage them to sell the fuel in line with the government efforts to broaden its use.

Caretaker Energy Minister Viset Choopiban said PTT Plc, the state-owned energy company and sole supplier of NGV, would raise the existing margin of 0.80 baht (3.8 baht = 1 US dollar) per kilogram to 2.30 baht. PTT would also provide 20 million baht as financial support to build NGV infrastructure in each service station interested in selling the fuel.

The number of vehicles running on NGV in Thailand now totals 14, 000, of which 2,000 are city buses. NGV is currently retailed at 8. 50 baht per kg. Running a vehicle on NGV costs half that of using diesel. The main drawback is the lack of filling outlets. There are now less than 70 of them, most in the Bangkok area.

Earlier, PTT offered margins of 1.40-1.70 per kg to oil companies but they said they needed a spread of 2.50 baht to make NGV sales commercially viable.

PTT president Prasert Bunsumpun said negotiations were under way with Petronas, Esso and Caltex, all of which had shown great interest in expanding NGV use.

At the moment, only Bangchak Petroleum Plc, the state-run oil refiner and marketer, has opened its first NGV filling service station in Bangkok. Bangchak planned new nine stations to be opened by the end of this year and ten more next year.

Supan Sutthisan, the general manager for retail sales and operations with Shell Co, said the company saw the new margin offered by PTT as commercially viable. Shell is selecting two or three sites in Bangkok for housing NGV filling stations. If the operations prove successful, he said, the company would expand its service to other areas in the surrounding provinces.

PTT plans to increase the number of its own NGV stations to 200 by the end of this year and to 740 by 2010.

Source: Xinhua