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A crude decision

The Cabinet yesterday approved imports of low-quality diesel from Russia to be distributed by 200 cooperatives nation-wide.



The diesel, with its high level of sulphur - 0.5 per cent, compared to the current maximum of 0.35 per cent - will help cushion the impact of higher oil prices.

The diesel causes high levels of pollution, which raises the question whether it's worth bringing  in at the expense of the environment? In addition, will it not discourage consumers from practising energy efficiency?

Manoo Siriwan, an oil expert, questioned whether Thailand has a  choice other than importing the Russian diesel. First of all, the diesel could have severe environmental repercussions if it is widely used in public buses. The government says it will try to limit the diesel imports to 300 million litres per month, but the question is how to control imports if the government allows them at such high volume.

PM Samak claimed the price differential would be Bt8 per litre compared to high quality diesel sold at petrol stations. Currently, the price of low-quality diesel on the Singapore market is only Bt6 different from high-quality diesel at Thai petrol stations. In reality, the price differential would be only Bt3 after transport price is added to the diesel price. Therefore, the government is likely provide a subsidy by waiving the excise tax.

Manoo said that to limit the environmental impact the diesel should be used in fishing boats or long-distance buses only. If it is used in the city, it will exacerbate pollution. The two sectors would need only 170 million litres combined per month. So what would happen to the other 130 million litres?

Some of it may find its way into supplies of high-quality diesel sold at petrol stations.

Thailand allowed the use of high-sulphur diesel years ago. Later, the quality requirement was upgraded for the sake of the environment. Now, the government is taking a step backward.  Besides, the government's abrupt decision to bring high amounts of low-grade diesel is suspicious. Why has the Samak government made such a decision so urgently?


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