• 
• 

Published on January 18, 2008

Energy Minister Piyasvasti Amranand yesterday insisted the current problem was not the shortage, but rather the high price. He said that with 30,000 tonnes of palm oil being imported and the upcoming harvest of domestic palms, the situation should improve.

"We have discussed the schedule with related agencies and been assured of the availability of a supply of edible crude palm oil after the introduction of B2.

Moreover, oil retailers have also assured us of a constant supply of palm oil for biodiesel production. And so B2 will be on sale nationwide from February 1 as planned," Piyasvasti said.

Pure biodiesel, or B100, is priced according to the crude-palm-oil price in Bangkok. Bangkok's price ceiling for the product is no more than Bt1 per kilogram above Malaysia's price.

Normally, the Bangkok and Malaysian prices move in tandem, but the Bangkok price has skyrocketed in the past month, and B100 producers are benefiting from the higher price.

With a compulsory mixture of B100 into diesel at a ratio of 2:98, demand for B100 will rise from 50,000 litres per day last month to 1.2 million litres next month. At present, there are nine plants producing B100, with a combined capacity of 2.18 million litres a day.

Following compulsory distribution, the Oil Fund will no longer subsidise the B100 price, which is Bt20.052 per litre this week, he said, adding that the current condition of the palm-oil industry would not be an obstacle to the development of biodiesel.

He said it was difficult at the moment to predict where global oil prices were heading, due to high volatility in world markets.

Moreover, prices are not determined only by supply and demand. Also taken into account is the value of the US dollar, speculation and the Organisation of Petroleum Exporting Countries' policy on oil production.

The Nation