More tax cuts for e85 on cabinet's agenda

Deputy Prime Minister and Finance Minister Surapong Suebwonglee said yesterday that excise tax would be slashed to 50 satang per litre for about two years.

"We're ready to put E85 on the national agenda," he said, saying the Excise Department is also reviewing a further cut in taxes on vehicles that can be powered by the fuel with an ethanol component of up to 85 per cent.

The Cabinet resolved in June to waive excise taxes on E85 vehicles to 25, 30 and 35 per cent, depending on engine sizes. Auto companies complained that the rates, similar to those for E20, are not attractive. The Cabinet then also waived tariffs on E85 retrofitting equipment and cut E85 excise taxes from Bt3.685 per litre to Bt2.5795.

Bangchak Petroleum yesterday said it would start selling E85 in October. President Anusorn Sangnimnuan said the price would depend on the Energy Ministry's decision, but to make the new fuel attractive, it should be at least Bt12 per litre cheaper than octane-95 petrol, which is now Bt43 per litre.

About 15 stations will start selling E85 during October-November.

Bangchak is also seeking discussions with auto companies on imports of E85 vehicles to evaluate the actual demand.

He expected E85 consumption would be 30 per cent of total petrol consumption in the next eight years, with E10 and E20 taking the rest. Bangchak can produce 2 million litres of E85 per month.

Deputy Agriculture Minister Theerachai Saenkaew said yesterday that the Cabinet would consider next Friday an integrated ethanol development plan, targeting Thailand to become a major alternative energy producer. About 10 per cent of crops are turned to ethanol at present, he said. In the 2008-2009 harvest year, Thailand will produce 73.2 million tonnes of sugar cane and 26.92 million tonnes of tapioca.

Though crude oil has retreated to U$136 (Bt4,580) a barrel this week from a peak of $146 peak, oil-consuming countries have suffered from higher cost of living.

According to the National Statistical Office (NSO) secretary-general Thananuch Tritipayabutr, during the first five months of 2008, household energy expenses rose to Bt1,770 per month, from Bt1,464 in the same period last year. While expenses on petrol rose 19.15 per cent, diesel expenses rose 35.33 per cent during the period, following the 29.23-per-cent increase in petrol and 36.98-per-cent increase in diesel prices.

Meanwhile Thailand's unemployment rate is now 1.5 per cent of the working-age population, or 569,000 persons, down from 583,800 or 1.6 per cent last year.