Thai government opts to let market forces to prevail

Ethanol prices in Thailand have fallen sharply from a peak of 25.30 baht (US$0.70) per liter recently to 19-21 baht (US$0.53-0.58), following the Energy Ministry’s decision not to ban octane-95 petrol retail sales by January 2007 as originally planned. The government plans to use market mechanisms to encourage more consumers to use gasohol, a government official was quoted as saying by a trade press. Gasohol currently retails for 1.50 baht (4.16 US cents) per liter less than 95 RON gasoline at petrol pumps across Thailand. “The government plans to maintain this price difference and hopes to gradually phase out 95 RON instead of setting some sort of a target or deadline,” he said. Pornsilp Taemsirichai, senior executive vice president of the Khon Kaen Sugar Group, an ethanol producer, said that local output should exceed 800,000 liters per day by February. During the first 10 months of 2006, ethanol consumption averaged about 350,000 liters per day. (December 20, 2006)