Caretaker Prime Minister Thaksin Shinawatra yesterday insisted that the government would maintain its original January 1 deadline to scrap the sale of octane-95 as part of its master plan to promote alternative fuels and reduce fuel imports.

The terminated sale of octane 95 would result in the ban of methyl tertiary butyl ether (MTBE), a flammable liquid used as an additive in unleaded gasoline.

Esso (Thailand) Co Ltd retail manager Chumchanit Chitman said the announcement made it clear the government would not delay the plan. However, the more important consideration lies with the insufficient supply of ethanol.

"To assure oil traders of its sufficiency, the government must ensure that new ethanol plants open on schedule and run continually. If the raw material is ready, we can even scrap the sale of octane 95 before January 1," he said.

Esso is now supplied with a million litres of ethanol a month from Thai Agro Energy Co Ltd, Thai Alcohol Co Ltd and Khon Kaen Alcohol Co Ltd, although it actually requires between 2 million and 3 million litres. The company is negotiating to secure more ethanol from new suppliers, in order to make sure of sufficient supplies to the end of this year.

"If the company were sufficiently supplied, we could resume gasohol promotion. Now we sell more octane 95 than gasohol; aside from the raw material, consumers also have a high demand for petrol. When we can terminate octane-95 sales will be determined by taking these factors into account," he said. Another factor is when the last batch of MTBE would run out.

Bangchak Petroleum Plc president Anusorn Sangnimnuan said his company was ready to follow the government's policy, as it had been active in selling octane-95 and octane-91 gasohol for some time. It now sells 26 million litres of the two types of fuel per month.

"There should be no problem in scrapping the sale of octane-95 petrol on January 1 without a raw-material shortage problem. Several ethanol plants are ready to produce more for commercial use. But if there is a shortage problem, the government should allow imports for emergency use, so that the policy can run smoothly," he noted.

However, Shell Co of Thailand general manager Supan Sutthisan is not sure if the termination can be carried out on schedule, because the key factor lies with the ethanol supply.

"For Shell, if we have to scrap the sales, we need between 5 million and 6 million litres of ethanol a month. Right now, the supply is only 2.4 million litres," he said.

After a meeting between the prime minister and caretaker Energy Minister Viset Choopiban, an Energy Ministry source said the fuel tariff (FT) for the October-January period would not be raised, due to the supply of additional natural gas from Udon Thani. He also hinted at a possible reduction in the base electricity rate.

Thaksin yesterday chaired a meeting with ministry officials on the 15-year energy plan. Viset told reporters afterward that during this period, power demand should rise by 10,000 megawatts, which would be covered by hydropower from neighbouring countries and coal, both of which were cheap. Under the plan, hydropower use would increase from 5 per cent now to 14 per cent in the next 15 years, while natural-gas consumption would fall from 68 per cent to 50 per cent.

Meanwhile, he assured the private sector that the ethanol supply would be sufficient.

"In the next two years, oil prices will remain high when Dubai crude oil should stand at US$66 to $68 (Bt2,500 to Bt2,600) per barrel," said Viset.

Deputy Energy Permanent Secretary Pornchai Rujiprapha said more details had to be completed, but ultimately the plan should reduce fuel imports by hundreds of billions of baht.

Energy Reporters

 The Nation