On July 30, 2026, Thailand's liquefied petroleum gas (LPG) prices were raised again, with retail prices rising to 28.5 baht per kilogram, the highest since August 2024. According to data from the Ministry of Energy, LPG prices have risen by 8.5% cumulatively in July, with the household 15-kilogram cylinder price increasing from 398 baht at the beginning of the month to 432 baht, putting significant pressure on household spending.
Global Supply Tightness and Regional Demand Surge
The current LPG price increase is mainly driven by international markets. The United States, the world's largest LPG exporter, saw its propane exports fall 12% month-on-month in July due to an early hurricane season and slowing shale gas production growth. Meanwhile, Southeast Asia's LPG import demand remained strong due to hot weather and industrial recovery. Thailand's LPG imports in July are expected to reach 680,000 tons, up 15% year-on-year. The supply-demand imbalance pushed up international propane prices, with FOB Middle East propane spot quotes rising to $610 per ton on July 29, a monthly increase of 9%.
Baht Depreciation Increases Import Costs
In addition to international price factors, the Thai baht continued to weaken against the US dollar in July, falling from 34.5 at the beginning of the month to 35.8, a depreciation of 3.6%, further increasing the baht-denominated cost of imported LPG. About 60% of Thailand's domestic LPG is imported, and exchange rate fluctuations are directly passed on to the retail end. The wholesale LPG price of Thailand's national oil company (PTT) followed the increase on July 30, with the per-kilogram price raised by 2 baht compared to the beginning of the month.
Impact on Livelihoods and Industries
LPG is the main cooking fuel for Thai households and a key energy source for the catering industry, taxis (those with NGV models converted to LPG), and small manufacturers. A medium-sized restaurant owner in Bangkok said the gas cost for July increased by about 5,000 baht compared to June, forcing a 5% price adjustment on meals. The Thai Taxi Association urged the government to continue subsidies; otherwise, drivers' incomes will shrink significantly. According to estimates, if LPG prices remain at the current level, taxi monthly fuel costs will increase by about 1,800 baht.
Government Emergency Response: Subsidy or Price Freeze
Facing public discontent, Thailand's Ministry of Energy held an emergency meeting on July 29 to discuss plans to stabilize LPG prices. According to sources, options include: 1) Use the National Oil Fund to subsidize the retail end, bringing prices back below 27 baht per kilogram; 2) Issue gas vouchers to low-income families; 3) Temporarily freeze LPG retail prices. Insiders revealed that the Ministry of Finance and the Ministry of Energy prefer short-term subsidies and may extend the current LPG subsidy program until the end of the year. However, this will increase the fiscal burden, with the 2026 fiscal year energy subsidy budget already over 85% used.
Impact on Thailand's Energy Stocks
The LPG price increase has mixed effects on related sectors of the Thai stock market. PTT (Thailand's national oil company), as the largest LPG supplier, benefits in the short term from rising inventory values, but its refining and retail divisions face increased costs. Independent LPG distributors such as SUSCO and PTT's retail subsidiary OR (PTTOR) face the risk of declining sales, as some users may switch to biomass or electricity alternatives. Broker analysts believe that if a subsidy policy is introduced, it will squeeze intermediary profits, advising investors to pay attention to policy details.
Future Outlook
Looking ahead to the second half of the year, the global LPG market still faces uncertainties. U.S. natural gas production is expected to recover in the fourth quarter, but hurricane risks persist. Demand in Southeast Asia may decline slightly after the rainy season, but import demand from India and China remains strong. Thailand's Ministry of Energy estimates that the average LPG price for the full year 2026 will increase by 8-10% compared to last year. Pressure on household users is unlikely to ease in the short term; the balance between government subsidies and market mechanisms will be key. Investors should closely monitor the cabinet meeting resolution on August 1 and international propane price trends.
