The chief executive of BBGI, a group of biofuel production companies under BCP Corp, said on Tuesday that the present plunge in the price of palm oil had caused the price of biodiesel to be close to that of the wholesale price.
Therefore, an increase in the palm-oil proportion mixed with biodiesel from 7 per cent to 10 per cent or 20 per cent would not affect the price at the pump for consumers, said Pongchai Chaichirawiwat.
The government should rapidly certify the quality of B100 biodiesel to serve the increase in the crude palm-oil proportion, and BBGI had already prepared for the required production-process improvement to meet the changed quality of biodiesel, he added.
However, while the production cost might be increased, it would provide more benefits in the long run by supporting the growth of the country’s biodiesel consumption without causing any detrimental effects to engines or the environment, the CEO said.
Currently, local crude palm-oil volume produced for the market is high when compared with the demand from consumption and the energy sector, while the global crude palm-oil price has plunged.
This has also caused the halt of crude palm-oil exports and led to the rise of crude palm-oil inventory by 30,000 to 40,000 tonnes per month, leading to the country’s palm-oil stocks reaching 400,000 tonnes, compared to the appropriate level of 250,000 tonnes, Pongchai said.
Every 1-per-cent increase in the proportion mixed with biodiesel can absorb surplus crude palm oil to the tune of around 15,000 tonnes per month, he added.
“As we are a company in the private sector and a biodiesel producer, in our opinion, we see the increase of the proportion mixed with the biodiesel as a stimulus of local palm-oil consumption, which can replace exports and benefit long-term crude-oil price stability, as well as help reduce the deficit of the country,” Pongchai said.