Thailand's former Finance Minister Korn Chatikavanij is urging that the new Pheu Thai-led coalition government to review its energy policy before motorists stop using the ethanol-gasoline blend currently in use in the country.
Thailand uses 1.5 million liters a day of ethanol for blending with fossil-fuel based gasoline to create gasohol and governmental energy policy-makers want to raise total ethanol production to 2.9 million liters per day.
At issue are policies of the National Energy Policy Committee, chaired by newly elected Prime Minister Yingluck Shinawatra.
Yingluck's government has modestly reduced prices on hydrocarbon energy and said that the reductions are integral to the government's policy commitments made to Parliament last week to ameliorate public expenditures. The policy impacts government revenues, as the state Oil Fund collects contributions from sales of all fuel in Thailand and the revenues generated from diesel and gasoline sales help subsidize alternative fuels such as gasohol as well as cooking gas.
Korn said that reducing prices at the pump is not the right solution and would affect the overall economic outlook in the long-term, as in the short term only oil speculators would benefit from the policy, The Bangkok Post reported.
Last week sales of ethanol-based gasohol fell 18 percent even as regular gasoline sales doubled.
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com More