He said the measure would help cut fuel costs, as the trend seems to indicate that oil prices will continue to rise over the next three years.

Speaking at a seminar entitled "The country's way-out of the oil crisis", Anusorn Sangnimnuan, Bangchak president, said yesterday that Thailand may have to import finished oil products from Singapore in the future if no new refineries are built, as the current ones are running at full capacity.

The combined capacity of the Kingdom's six refineries is one million barrels a day.

Anusorn predicted that the oil price on the Dubai market in the second half this year would rise by a further US$5 to $6 a barrel. It was estimated that the average oil price for the whole year would be at $68 a barrel, but crude oil on the Dubai market has already touched $72 in reaction to the recent conflicts in the Middle East.

Anusorn said that even after this current conflict has eased, the oil price would continue to rise over the next couple of years. This was due to five factors, he said: the rising world economy; the lack of refineries; the increasing cost of production; rising demand for oil; and the risk of further international conflicts.

He said that if Thailand failed to construct new refineries, it might end up having to import finished oil products, at a cost of $2-$3 per barrel, or Bt0.50 to Bt0.75 per litre, more than locally refined products.

On the subject of alternative energy, Anusorn said that the use of bio-diesel had progressed slowly because it involves several factors such as farmers, oil traders, car companies and the public. He said that if the government was serious in developing alternative energy resources, it should encourage all parities to work together to achieve this goal.

Boonsong Kerdklang, deputy director-general of the Energy Policy and Planning Office, said the government was trying to promote the use of alternative energy. The office has proposed ways to import 30 million litres of ethanol in November if the four new local ethanol plants do not become operational by the fourth quarter of this year.

Chitrapongse Kwangsukstith, senior executive vice president of PTT Plc, said the company might have to reduce the number of vehicles it planned to have installed with NGV engines from 70,000 to 50,000 this year because of the length of time it took to get parts from overseas. "It takes at least six months," he said.

Meanwhile, PTT is trying to secure energy sources in neighbouring countries such as Indonesia, Burma and via the joint development area between Thailand and Cambodia.

At present, 70 per cent of the natural gas currently used in Thailand comes from local sources with the remainder imported from Burma. The reservoirs of natural gas in the Gulf of Thailand should last for another 20 to 30 years.

Ninnart Chaitheerapinyo, vice president of Toyota Motor (Thailand) Co, said the rising oil price had been detrimental to car sales in the first half this year, with figures down 3.2 per cent on the same period last year. But he said the impact was still minor when compared to other industries.

Toyota recently reported that in the first six months of the year, 334,776 new vehicles were sold, down 3.2 per cent on the year. In June alone, vehicle sales dropped 12.4 per cent to 55,532 from a year earlier.

Passenger car sales fell 3.1 per cent on year to 16,030, while commercial vehicle sales, which include one-tonne pickups, dropped 15.7 per cent on year to 39,502. Sales of one-tonne pickups fell 15.3 per cent to 36,174.