A plan to make gasohol E20 the primary fuel for motorists in July has been postponed indefinitely because of higher biofuel prices, creating a financial burden for the Oil Fuel Fund.
The Oil Fuel Fund Administration Office (Offo), which subsidises gasohol and biodiesel, found prices of ethanol and palm oil-made methyl ester have increased for many years, exceeding even those for pure gasoline and diesel.
Officials want E20, a mix of 20% ethanol and 80% unleaded gasoline 95, to replace gasohol 91, making gasohol 95 an alternative fuel for drivers. Yet the plan has faced several delays.
Gasohol 91 and 95 have a 10% ethanol blend. They differ in their octane rating numbers.
Permanent energy secretary Kulit Sombatsiri said biofuels have lost their competitiveness in terms of production costs.
The reference price of ethanol, which is made from sugar and cassava, stood at 24.83 baht a litre on Feb 12, compared with 13.83 baht a litre for the ex-refinery price of gasoline 95.
The methyl ester reference price was 42.83 baht per litre, compared with 15.5 baht per litre of high-speed diesel, excluding tax and levy.
According to Offo, the subsidy for gasohol E20 was 2.28 baht a litre last Thursday.
The subsidy for gasohol E85 was 7.13 baht a litre and the subsidy for biodiesel B20 was 4.16 baht a litre.
E85 is an 85% ethanol blend, while B20 is a mix of 20% methyl ester and 80% diesel.
“We have to delay the E20 plan until biofuel costs decline, with their demand and supply in balance so they do not affect the Oil Fuel Fund,” said Mr Kulit.
E20 was launched as an alternative fuel in January 2008 when the global oil price rose to US$100 per barrel.
Officials support use of E20 because they want to see sugar cane and cassava planters play an increasing role in the domestic oil market.
The government also wants to increase the prices of agricultural commodities such as sugar, cassava and palm oil by using them as biofuels.
Under the Offo Act, subsidies for biofuels must be capped and terminate within seven years after 2019.
The plan to make E20 the primary petrol faced several delays in 2020 because the government needed ethanol to make hand sanitisers when Covid-19 hit Thailand.