Govt resumes E85 promotion with additional Bt2/litre subsidy

Energy Minister Anantaporn Kanjanarat said E85 had become unattractive for motorists since its retail price had been kept largely unchanged, while the prices of E20 and other lower ethanol-blended petrol had been lowered significantly.
The Energy Policy Administrative Committee had, therefore, agreed yesterday to increase the Oil Fund’s subsidy for E85 from Bt7.23 to Bt9.23 a litre, effective today, he said.
Nevertheless, the subsidy for E20 has also been raised, by Bt0.50 a litre to a total of Bt2.4 a litre.
Anantaporn said the panel’s decision would encourage more use of gasohol products and benefit the farming sector, since ethanol was made from tapioca and sugar-cane molasses.
E85 fuel is an 85:15 blend of ethanol and gasoline, while E20 has a 20-per-cent ethanol content.
Following the energy committee’s decision, PTT and Bangchak Petroleum yesterday announced they would be cutting the retail price of E20 by Bt0.54 a litre and E85 by Bt2.14 a litre, effective today.
The reductions are slightly higher than the additional subsidies, since oil firms normally also take into account the change in other oil costs.
Prices at refilling stations in Bangkok are now Bt26.80 a litre for gasohol 95, Bt26.38 for gasohol 91, Bt24.44 for E20, Bt20.34 for E85, and Bt23.39 for diesel.
The retail price gap between gasohol 95, which has 10-per-cent ethanol content, and E85 is now widened to Bt6.46 a litre, from Bt4.32, and the gap between gasohol 95 and E20 to Bt2.36 per litre, from Bt1.82.
At yesterday’s meeting, the Energy Policy Administrative Committee – chaired by Anantaporn – also approved using the Oil Fund mechanism to keep the price of liquefied petroleum gas unchanged at Bt22.29 a kilogram for this month, through reducing the fund’s levy on LPG from Bt0.9262 per kg to Bt0.0827, effective today.
As a result, the Oil Fund’s subsidy expenses on LPG products will rise to Bt54 million a month.
Without the reduced levy, the local LPG price would have to be increased by Bt0.84 per kg, since its costs have gone up along with higher international prices and a recent slight depreciation of the baht, the minister explained.
Including the additional subsidy provided to E85 and E20 gasohol, the Oil Fund will increase its monthly expenses by Bt62.2 million to a total of Bt176.62 million.
The fund currently has an overall positive balance of Bt43.6 billion.
An Energy Ministry official said E85 demand would be given a further boost when the excise duty on vehicles that can run on the fuel is reduced by 5 percentage points from the beginning of next year. “This will mean a reduction of Bt50,000 to Bt60,000 per vehicle,” he said.