Increased biofuels will keep oil demand flat

Thai oil demand is expected to stay flat at around 760,000 barrels per day (bpd) over the next two years. “Oil demand will be flat in 2008 and 2009 because biodiesel, ethanol and CNG (compressed natural gas) will replace oil by 20%,” said Piyasvasti Amranand, Thailands energy minister. Bangkok does not impose taxes on biodiesel and subsidizes biofuels via an oil fund, which comes from the surcharges from domestic retail prices of diesel fuel and gasoline. Sales of gasohol, which contains 5% ethanol, have risen more than two-fold since its introduction in 2005. “Demand for gasohol has increased several fold to 5.1 million liters a day,” said Kurujit Nakornthap, deputy permanent secretary from the Energy Ministry. On the other hand, oil product demand fell by 3.7% between 2004 and 2006, the IEA said. Thailand has three to four biodiesel producers with domestic refiner Bangchak Petroleum having the lion’s share. Rising electricity demand is also pushing gas-dependent Thailand to build its first nuclear power plant by 2021, although Piyasvasti said a location has not yet been chosen. (August 23, 2007)