Thailand: Industry Minister Critical of Quick Introduction of e85 Fuel

E85, a mixture of 85% ethanol and 15% gasoline, made its debut last week at a single PTT service station in Bangkok at a price of 20.19 baht per litre.

Majority state-owned PTT expects to have 14 stations offering the fuel by year-end, even though there are almost no cars locally that can use the fuel, save for a few models that are being tested by carmakers.

Chakramon Phasukvanich, the permanent secretary for the Industry Ministry, said that E85 should be introduced step by step to give the parties involved, such as auto makers, petrol stations and oil refineries, enough time to adapt to the new environment.

''We agree with the E85 implementation but disagree with a policy to replace gasoline with E85 within three years. The fuel should be introduced as a new choice for the consumers and let them decide on the fuel,'' said Mr Chakramon, whose ministry is responsible for automotive development policy. ''The existing energy development plan is rather sound but it is surprising that the Energy Ministry is so speedily implementing E85 fuel.''

In addition, Mr Chakramon said the government may lose a lot of money in an effort to encourage consumers to switch to E85, given that its subsidised price will be about one-third cheaper than standard fuel. Authorities are reducing or waiving excise taxes to promote the fuel and if that is insufficient, money from the state Oil Fund will be used to subsidise E85.

''We disagree with reducing or waiving the excise tax because that will distort the market,'' he said.

Atchaka Sribunruang Brimble, the director-general of the Industrial Economics Office, also said that if the excise tax on E85-powered vehicles was cut to below 25%, it would hurt the whole automotive industry.

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