Thailand debates cutting oil subsidies

Regulators in Thailand are debating three options for oil subsidy reform. These include ending subsidies from the State Oil Fund and oil refineries; simultaneously terminating the State Oil Fund subsidy while continuing support from refineries; or gradually eliminating the subsidy from both the oil fund and refineries. The fund spends some 500 million baht (US$ 15.5 million) per month on liquefied petroleum gas (LPG) price subsidies, or one baht per kilogramme, and 250 million baht on repaying the debt for previous LPG subsidies. Energy Minister Piyasvasti Amranand has said that the reforms will take place before elections in December.

Source: Bangkok Post

Iran to introduce gasoline rationing

Iran on 20 April set out the final details of its plan to introduce gasoline rationing in the country, starting 22 May. Consumers will be allowed to continue purchasing a fixed amount of gasoline at the highly subsidized price of 1,000 rials per liter (about US$ 0.11), but will have to pay a higher price for volumes beyond their ration quota. Iran's OPEC governor told Iranian news media that Iranian households will cut gasoline consumption only when the price rises to 4,000 rials (US$ 0.44) per liter ($1.67 per U.S. gallon). Iran's gasoline consumption is currently 81 million tons. That can be cut to 60 million tons if the rationed gasoline project is approved, said Mohammadreza Ne'matzadeh, the Managing Director of National Iranian Oil Refining and Distribution Company.

Sources: Mehrnews, People's Daily On-line

Vietnam enacts fuel subsidy reform

The Government of Vietnam is allowing gas stations to set their own prices at the pump so that prices more closely reflect market rates. The Ministry of Finance has said that fuel subsidies take up 5% of the annual state budget. Last year the government spent some 8-9 trillion dong (about US$ 500 million) on fuel subsidies. Fuel subsidy reform comes alongside a larger drive to liberalize Vietnam's economy, driven in part by the country's recent entry to the WTO.

Source: Viet Nam News

Jamaica contemplates fertilizer subsidy as biofuel boom drives up prices

Jamaica's Ministry of Agriculture will meet with agricultural commodity bodies to discuss how to tackle rising fertilizer prices. Donovan Stanberry, permanent secretary to the ministry, said it was too early to commit to a subsidy to help alleviate the burden on farmers, saying that decision would be up to the Ministry of Finance. Since December 2006, fertilizer prices have increased on average between 18 and 31 percent. Stanberry blamed the higher prices on an increased demand for fertilizer on the international market driven by the growth of grain stocks for biofuels.

Source: The Jamaica Observer

Tax Break for ConocoPhillips sparks controversy

Democrats in the US Congress have vowed to reverse an IRS ruling that would allow ConocoPhillips and Tyson Foods Inc. to receive a tax break for producing diesel fuel from animal fat. The tax credit of $1 per gallon of renewable fuel could amount to hundreds of millions of dollars. ConocoPhillips, the US oil company, and Tyson Foods, the world's largest meat producer, have said they will not proceed with the joint venture if the tax credit is withdrawn.

Source: Bloomberg