Gasohol plans jeopardized by rising ethanol prices

BANGKOK: -- The government's plans to back gasohol as an alternative fuel have been thrown into jeopardy by the decision by ethanol producers to raise the price of their product.

Today the Energy Policy and Planning Office (EPPO) was forced to agree to gasohol subsidies, after ethanol producers called for the price of ethanol to be increased from Bt12.75 to Bt16.50 per litre.

Mr. Metta Banturngsuk, the office's director-general, told reporters after today's meeting of the Energy Policy Administration Committee that while the State Oil Fund would subsidize the price of gasohol, the exact value of the subsidy had yet to be determined.

The government is keen to ensure that the price of gasohol remains Bt1.50 per litre lower than that of benzene 95 in order that motorists have an incentive to purchase a fuel which helps Thailand save money on expensive oil imports.

"The government is endeavouring to promote gasohol in order to address the problem of oil imports and help maintain the price of agricultural goods", Mr. Metta said.

"But if the price is excessively high, we need to take appropriate action".

Ethanol producers have suggested that the price of their product be raised from Bt12.75 to Bt16.50 per litre, citing the rising cost of the raw materials - molasses and tapioca - from which ethanol is made.

As a result, three ethanol production plants which were due to open in May have had to postpone their launch dates, pending a decision on the new price.

But fuel traders want to keep the price of ethanol below Bt15 per litre, warning that they could face losses should the price rise any further.

--TNA 2005-06-02

Molasses and tapioca! I had no idea you could make ethanol out of those. Ethanol, of course, is what we drink in every intoxicating beverage from beer to wine to whiskey. In the USA, which has corn fields as far as the eye can see, gasohol is made from corn, I think.

I wonder if the Thai breweries and distilleries control the ethanol market. Does Thailand have a distillery?