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Tag: biofuels

  • Thailand Absorbs 92 Billion Baht Deficit to Cushion Retail Fuel and Cooking Gas

    Thailand Absorbs 92 Billion Baht Deficit to Cushion Retail Fuel and Cooking Gas

    Thailand is subsidising retail diesel by 4.95 baht and gasohol by 4.20 baht per litre. The support has pushed the state energy fund into a 92.2 billion baht deficit.

    Cooking gas is capped at 423 baht per 15-kilogram cylinder through 31 October. That ceiling shields transport fleets, households and street food operators from volatile crude markets.

    Deficit Pressures on the Oil Fuel Fund

    Accumulated net losses at the state-backed Oil Fuel Fund reached 92.2 billion baht on 20 September. Higher crude prices drained cash as the fund held down retail caps on transport fuel and liquefied petroleum gas nationwide.

    Energy permanent secretary Prasert Sinsukprasert confirmed the ministry will avoid sudden market pass-throughs. If crude stays high, authorities will raise pump prices in small increments to ease pressure on the state ledger.

    Biofuel Shift and Targeted Tax Relief

    Future tax relief will focus on renewable blends rather than blanket cuts across all transport fuels. Finance Minister Ekniti Nitithanprapas said upcoming excise reductions will target gasohol E20 and biodiesel B20, both made from domestic agricultural feedstock.

    Gasohol E20 blends 20 per cent ethanol derived from local cassava and sugar cane. Biodiesel B20 uses 20 per cent palm oil methyl ester. Both fuels receive higher fund subsidies than lower-percentage blends, tying relief directly to farm earnings.

    What It Means for Retail and Fleet Costs

    For logistics fleets, delivery operators and restaurant owners, the subsidy keeps overhead predictable. Street food vendors rely on 15-kilogram LPG cylinders to protect daily margins, making the 423 baht cap critical for urban food pricing.

    This strategy creates a commercial preference for domestic biofuels over imported petroleum. Commercial fleet operators will find stronger financial incentives to switch trucks and delivery vans to B20 and E20 as taxes align behind local crops.

    Power Tariffs and What to Watch Next

    Power regulators will use the fuel tariff adjustment mechanism to manage utility bills against imported liquefied natural gas costs. They review the rate every four months to reflect actual fuel expenses and policy costs.

    Any excise tax cuts from the Energy and Finance ministries will take effect in fiscal 2027, starting 1 October. Before then, the retail price cap on cooking gas expires on 31 October.

  • Further steps needed to thwart EU’s move to ban palm oil in biofuels

    Further steps needed to thwart EU’s move to ban palm oil in biofuels

    More engagements, consultations and follow-up actions are needed to remove the European Union’s (EU) threat to ban palm oil use in biofuels, said industry veteran Tan Sri Dr Yusof Basiron.

    The former Malaysian Palm Oil Council CEO said Malaysia’s stance was still not being heeded by the EU Parliament, despite various talks and engagements being undertaken and conducted at the government-to-government level.

    “There have been clear statements by the governments of major palm oil-producing countries to oppose the ban and even those hinting at possible trade actions or retaliation, including consulting the World Trade Organisation, to deter the EU from implementing the discriminatory ban on palm oil for biofuels,” he said.

    Yusof said the MPOC and the Malaysian Palm Oil Board representative offices in the EU recognised the need to counter the ban when the threat first emerged.

    As a result, many initiatives had been taken, including continuous talks with the EU countries, to oppose the proposed ban by the trading bloc.

    The EU Parliament voted on Jan 17, 2018, to ban palm oil-based biofuels by 2021, while other vegetable oil-based biofuels such as those from soya oil and rapeseed oil can continue to be used until 2030.

    Spain was the latest EU country to speak out against the resolution after France, Sweden, the United Kingdom (Conservative MPs who are part of the governing party of Prime Minister Theresa May), Germany and the Netherlands.

    Yusof said palm oil-producing countries had reacted to this singling out of palm biofuels for the ban as a trade discrimination that would affect the imports into the EU, because locally-produced soya and rapeseed oils were not similarly subjected to the ban.

    “There are also Members of the European Parliament (MEPs) who are sympathetic to maintaining good trade relations with palm oil-producing countries.

    “This is reflected in an amendment submitted by 57 MEPs to drop the ban on palm biofuels. Nevertheless, 492 MEPs voted in favour of the ban, although the number was far less than the 640 who had voted for it in April 2017,” he said.

    However, he said, it was common for the EU Parliament to vote based on popularity trends, knowing that the next round of scrutiny for approving the Renewable Energy Directive (RED) Bill would be done at the tripartite meeting or trilogue, where the council would discuss and recommend the final version of the RED Bill.

    The trilogue to be held soon will consist of government representatives of EU member countries, the Commission and Parliament.

    “It is already envisaged that the Council and Commission, being technically competent with the legal, economic and scientific ramifications of the proposed discriminatory ban on palm oil, are not supportive of the ban.

    “We are hopeful that any future ban on the use of biofuels to be approved in the RED Bill will not be discriminatory towards palm oil,” Yusof said.

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