Prepare for higher oil prices: Energy Ministry

"It is perceived that Opec should be pleased to see the Dubai crude price averaging US$90 to $100 (Bt3,000 to Bt3,300) per barrel. It is believed that if the price weakens below $90, Opec may reduce output. If there are other disruptions, oil prices could push up further," he said.

Yesterday, all oil companies raised domestic petrol prices 40 satang a litre, pushing it to a record Bt33.69 a litre.

Bangchak Petroleum president Anusorn Sangnimnuan said oil retailers would decide today if diesel prices would also be raised.

He believes the average price per litre this year should be about Bt32 to Bt34 for petrol and Bt29 to Bt32 for diesel.

Yesterday, the Dubai crude-oil price rose $3.28 a barrel to $92.60, due to Opec's refusal to increase output, while US inventories dropped by 4.1 million barrels in response to geopolitical tension in Pakistan and Nigeria.

Refined petrol rose $2.34 per barrel to $106.41, while diesel remained at $111.14.

Piyasvasti said that amid high oil prices, consumers would be forced to use alternate fuels.

Higher demand for gasohol and biodiesel cut Thailand's oil imports by Bt4.7 billion last year, and the trend should save another Bt14 billion for the Kingdom this year.

"Some motorists are still avoiding gasohol, or else demand would be 15 million litres a day, up from 7.4 million presently," he said.

Still, high oil prices will drive up gasohol demand, and by 2013 conventional petrol could be driven out of the market if this trend prevails.

Bangchak began the marketing gasohol E20 yesterday, a few days after its introduction by PTT.

Sold at five stations for now, that number could expand to 20 later this year.

Anusorn said initially, E20 demand should be about 100 litres per day per station.

Piyasvasti expects E10 demand to rise to 11 million litres a day late this year, while E20 demand should be 200,000 litres a day by then.

The ethanol demand later this year could be 1.14 million litres a day.

On the government's plan to introduce E85, which contains 85 per cent ethanol, Anusorn said the government must be clear about the pricing formula and the excise tax structure for E85-compatible vehicles.

The Nation