Thailand to tax E20 cars at lower rate to lift ethanol demand

Thailand has decided to impose an excise tax rate of 25% on cars capable of running on 20% ethanol-blends from January 1, 2008 onwards, 5% lower than the 30% imposed on regular cars, to boost the use of ethanol-blended fuels, a government official said. The new tax rate is higher than the government’s original plan of 20%, but the original plan would have been effective only from January 2009. Natural gas-fueled vehicles are charged a tax rate of 20%. According to estimates, some 30,000 E20 cars are expected to be made available next year by manufacturers, including Toyota and Honda. Thailand currently sells 10% ethanol-blended gasoline, also known as gasohol. Gasohol sales account for around 20% of total gasoline sales of 24 million liters per day in the country. Local refiner Bangchak is expected to start supplying 20% ethanol-blended gasoline from next year. (August 15, 2007)