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BIOFUELS
Petrol phase-out targets ethanol glut
By: YUTHANA PRAIWAN
Published: 2/07/2009 at 12:00 AM
Newspaper section: BusinessThe government aims to clear the ethanol surplus with a controversial policy to phase out regular petrol from the market, a senior Energy Ministry official says.
In 2002, the Thaksin Shinawatra administration granted licences to ethanol producers as part of its policy to replace pure petrol with alternative fuels.
But inconsistent energy policy and frequent changes of government have led to excessive ethanol supply, creating losses for ethanol producers.
Pure petrol has also remained available in the market.
Thailand's ethanol output is 1.3 million litres per day. Current capacity is 2 million litres a day, but is set to increase by another 800,000 litres a day this year.
Premium petrol is now priced about 9.90 to 10.80 baht per litre more than gasohol, depending on the level of the state Oil Fund and excise tax.
Most vehicles can run on gasohol, said the senior official. But many motorists still prefer to use pure petrol, even though the agency has worked to keep gasohol between 3.80 and 4.60 baht per litre cheaper than regular petrol.
"We need to limit their choices otherwise we would never make it happen," said the official. "Some motorists never change their mind as they believe that pure petrol can boost efficiency of engines, while gasohol could lower its efficiency."
Regular petrol consumption has stayed at 8 million litres per day this year despite gasohol being priced much lower, which could mean price is inadequate as a motive for switching. Ethanol consumption is now 1.2 million litres per day.
An additional spur for promoting ethanol is that Energy Minister Wannarat Channukul is a member of Parliament representing Nakhon Ratchasima province, home to Thailand's largest cassava plantations. Cassava is one of two crops used to produce ethanol.
"If he [Mr Wannarat] does nothing to solve the ethanol surplus problem, his votes may decrease in the next election," said the official.
"The policy of phasing out regular petrol was implemented in his term for this reason."
Panich Pongpirodom, director-general of the Department of Alternative Energy Development and Efficiency, said the agency had been trying to make motorists trust gasohol by launching the 100,000- kilometre gasohol test run for passenger cars and motorcycles in 2007.
"I think the result was clear enough to educate those motorists to know that gasohol does not harm their vehicles engines, even models from before 1995," said Dr Panich.
The state agency had also sought co-operation from motorcycle producers in certifying the test results but has yet to receive a response.
Adisak Rohitasune, senior vice-president of Asian Honda Motor Co, the motorcycle market leader, said all four-stroke models could run on gasohol, but most two-stroke motorcycles could not. "So some motorcycle owners, who are mostly on low incomes, would suffer from the decision," he said
