Thailand has taken on an important role, both at the ASEAN and Asian level, in the field of energy.

Energy Minister Poonpirom Liptapanlop said at a recent cabinet ministers meeting that a consensus was reached to appoint the Ministries of Energy, Industry, Finance and Agriculture & Cooperatives to develop a plan to counter the oil crisis and revive the economy.

The Ministry of Energy will spearhead the efforts to promote consumption of gasohol E85, raw materials and expansion of service stations. Thailand is deemed ready from the viewpoint of raw materials. There are 8 ethanol factories which use sugar cane as its primary source of raw material, and have a combined production capacity of 890,000 liters per day. Maximum production is set at 1.5 million liters of ethanol per day.

Gasohol consumption gas increased 100% to 8 million liters per day, which is equivalent to using up to 800,000 liters of ethanol per day in the production process of gasohol.

By the end of 2009 Thailand should have 11 more ethanol factories to double ethanol production. In 2011 it is expected that E85 will account for 60% of the market, but it will depend on the public’s perception and acceptance of E85 as well. More importantly the increase in ethanol production for E85 will help the agricultural sector by 82 billion Baht per year.

The Ministry of Energy has assigned the Petroleum Authority of Thailand (PTT) Plc to take responsibility over the distribution of E85 and expansion of another 30-50 service stations throughout Thailand within the next 3-5 months.

However E85 will use 20% more benzene which is why the key incentive for customers will lie in lower excise and customs tax. The collection of excise tax on ethanol and benzene is currently 3 Bath per liter. The Ministry of Finance will consider the proposed tax cuts.

The Ministry of Energy will speed up consumption of natural gas in vehicles or NGV. The direction for implementation will begin with a feasibility study on gas pipelines laid on major travel routes or national highways that will cover the entire country. Initial investment for natural gas pipelines within the next 3 years is estimated at 34.85 billion Baht starting from 2009-2011.

There will be additional procurement of and servicing of NGV vehicles from the initial 71,000 units to 123,000 units by the end of 2008. There will be 355 service stations and an increase of 5,464 tonnes of NGV gas production per day in 2008. Other incentives will be the lifting of import tax on gas tanks and equipment for controlling NGV systems for the next 4 years until December 2012; extension of excise tax exemption for NGV retrofit systems for another 3 years from the current deadline set to end on November 15, 2007.

Vehicles that use E85 fuel would be taxed at rates ranging from 25% to 35% of the factory price, a rate similar to that charged for E20-compatible cars, which were introduced in Thailand in January.

Authorities hope to introduce E85 gasohol, a blend of 85% ethanol and 15% petrol, in the local market by the end of the year, a full three years ahead of schedule.

ASEAN Autobiz, Vol. 7, N0. 75, June 2008, Bangkok Post, 07.06.2008

Home :: Back :: Next