"We stopped producing ethanol last month because of the oversupply in the market. Unless the government encourages gasohol consumption, other manufacturers may have to stop their production soon," marketing division manager Chompol Kandhavivorn said yesterday.

The company's production capacity reached 150,000 litres per day. There are seven ethanol producers, with a combined daily capacity of 1.05 million litres.

The National Energy Policy and Planning Office's announcement last month to postpone withdrawing 95-octane petrol has caused the oversupply situation. As a result, the seven ethanol producers have to shoulder all costs.

The Thai Ethanol Manufacturers' Association has called for the government to end sales of 95-octane petrol next month, according to its chairman Sirivuthi Siamphakdee.

He said the government should set up a policy to force all petrol stations nationwide to sell gasohol-91 by year-end to increase demand for ethanol.

"If the request is refused, the government should take responsibility by purchasing all oversupply capacity from us," said Tat Wanakornkul, executive vice president of Petrogreen.

He said the National Energy Policy and Planning Office used to claim that supplies did not meet demand. It targeted production capacity of 800,000 litres per day.

Presently, the seven companies have a production capacity of more than one million litres per day, while daily demand for ethanol is only 358,000 litres.

Tat said oversupply from all producers had reached 11 million litres.

"Now the supply is more than the government's target. Hence, it is the proper time to quit 95-octane petrol and seriously promote gasohol consumption," he said.

"Producers cannot export ethanol to other countries because some countries have banned imports and others have tax barriers," said Ugrit Asadatorn, executive director of Thai Roong Ruang Group.

Sirivuthi said if ethanol producers had to stop their plants, it would severely affect local farmers.

Chalida Ekvitthayavechnukul

The Nation