Energy Ministry Keen to Maintain Subsidies for Biofuels

Business News/Analysis, Opinions, Policy, Thailand

January 31, 2020

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(Bangkok Post) The Energy Ministry plans to revoke the seven-year time frame for terminating the subsidies for biofuels, expecting to amend the State Oil Fund Act of 2019 within two years. Viraphol Jirapraditkul, director of the Energy Fund Administration Institute (EFAI), said Energy Minister Sontirat Sontijirawong told the Prime Minister’s Office to consider amending the revised act to maintain price subsidies for biodiesel and gasohol in the country’s retail oil market.

The subsidy termination would happen sometime from 2022-26 under Section 55, with subsidies for biodiesel and gasohol from the Fuel Oil Fund terminated in three years.

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“The energy minister wants to use this subsidy measure to support consumption of biodiesel and gasohol, buying a massive volume of palm oil, sugar cane and cassava that are raw materials for biofuel from Thai farmers,” Mr Viraphol said.

“In addition, Thailand can reduce its import volume of crude oil.”

He said if the country’s oil retail market does not have the subsidy measure to help biofuel, overall oil pricing and energy security will suffer.

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For gasoline, the ministry will soon terminate gasohol 91, promoting E20 as a fundamental petrol, requiring a higher subsidy for E20 to promote local consumption.

The fund will collect a higher levy for users of gasohol 95, he said. READ MORE

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