Firstly, I will focus on the strengths of Oil and Gas in the case of the economic growth as
factors that are positively associated with oil prices. Higher demand amid a robust economic
recovery, Rate of economic growth is higher and demand for fuel on a daily basis in response to
economic development, has risen. This has resulted in higher oil prices. That it makes every oil and
gas companies exploration, development and production of oil and gas. In addition, Oil producers
are to step up their strategy to cope with higher competitors and demand amid a robust economic
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recovery. For example, “ All producers may need to lift production by 15% next year from 4,100
million cubic feet par day at present. PTTEP produces about 33% of all the gas output in Thailand.
The need for more supplies reflects a second year of economic recovery, particularly in the power,
industrial and transport sectors” (Bangkok Post,6 November 2010 ). Moreover, the government
support to recent price increases and also the decision to allow oil companies to increase prices
within a band of 10% augurs well for the industry. This step is likely to reduce government
interference and provide some autonomy to oil companies when it comes to increasing petrol and
diesel prices in order to protect margins. Further, the duty cuts are also likely to result in reduced to
follow recoveries by way of subsidies on LPG and kerosene.