The Energy Ministry's Energy Business Department will in November issue a regulation banning the sale of octane-95, giving oil retailers a month to unload their octane-95 gasoline inventories, estimated at about 11 million litres.

From January 1, the operators of any station selling octane-95 gasoline will be subject to a maximum fine of Bt100,000, or one year in prison, or both."We expect the regulation to be announced in the Royal Gazette in November, and to take effect on January 1," said Panich Pongpirodom, director-general of the department.

The regulation ends all doubts as to whether the premium gasoline will be cleared out of the market. The doubts had arisen due to concerns over the supply of ethanol, and the number of cars on the road manufactured before 1995. Gaso-hol, a mixture of ethanol and gasoline, was generally believed to be incompatible with cars more than 11 years old.

Panich said PTT Plc and the Alternative Energy Development and Efficiency Department had test-run older cars for 80,000 km. So far, no problems had been detected with the engines, he said.

As for the supply of ethanol - which would be mixed with gasoline at a ratio of 10:90, replacing an imported chemical called MTBE - the ministry said it would invest in a depot that would stock up to 30 million litres of the additive, said Boonsong Kerdklang, deputy director-general of the Energy Policy and Planning Office.

At present, local ethanol plants' combined capacity is 400,000 litres per day, while it is estimated that 800,000 litres would be needed daily if octane-95 sales are to be banned.

"The 30 million litres would be enough during the transition period. This should stabilise the price and provide enough for one month's consumption," Boonsong said, adding that the ministry plans to review the domestic production and imports. The inventory cost would depend on the ratio of locally produced and imported ethanol.

Promoting gasohol is part of the government's plan to reduce the national energy import bill. Aside from the octane-95 ban, the Energy Business Department will also restrict the opening of gas stations that distribute liquefied petroleum gas (LPG), better known as cooking gas, which has grown in popularity among taxi drivers and general motorists in the wake of rising oil prices.

In a bid to encourage people to shift from cheaper but more dangerous LPG to natural gas for vehicles (NGV), the department is prepared to offer a 50-per-cent discount on the annual car registration fee for all NGV-driven cars and a 25-per-cent discount for cars that run on a combination of oil and NGV.

While these policies were being drafted over the past eight months, fuel consumption has declined steadily. On average, daily diesel consumption dropped from 55.6 million litres in 2005 to 50.9 million this year. In August, diesel consumption slumped to 46.2 million litres.

Meanwhile, during the eight months, average daily gasoline consumption dropped from 20.1 million litres to 19.6 million.

Fuel imports in the period also eased 1.5 per cent from 854,000 barrels a day last year to 842,000 barrels.

However, the import value rose 25.3 per cent to Bt522 billion, due to the appreciation in oil prices. In the period, Thailand also earned Bt36 billion from crude oil exports and Bt81 billion from refined oil exports.

Energy Reporters

The Nation