EFAI says reduced retail price of E85 will end next year
The Energy Fund Administration Institute (EFAI) says the reduced retail price for gasohol E85 will end some time in 2020, as this fuel has not been embraced by motorists over the past decade.
The EFAI is also considering terminating subsidies for gasohol and biodiesel within three years because the existing structure interferes with the stability of local fuel prices.
Gasohol E85 has been promoted since 2008 as a biofuel blended with ethanol from local crops. Other options for motorists include E10 (gasohol 91 and 95) and E20.
E85 is 7.38 baht per litre cheaper, or 25%, than E10. For E20, the retail price is 0.80 baht per litre cheaper, or 10-12%, than E10.
The price gaps have been subsidised directly from the State Oil Fund.
The Energy Business Department said sales of E85 stood at 1.28 million litres per day over the first 10 months of 2019, while E20 sold 6.46 million litres per day for the period.
Gasohol 91 and 95 posted sales of 9.55 and 13.8 million litres per day, respectively.
A source at the Energy Ministry who requested anonymity said fuel retailers, refiners, biofuel producers and car companies have been told to prepare for the changes.
"There is a possibility the large subsidies for all fuels will be terminated," the source said.
The source said the subsidy termination is in line with the State Oil Fund Act of 2019, which took effect on Sept 24. Energy policymakers have limited cash from the fund to cap fuel prices.
The fund is meant only for emergency uses, not exceeding 40 billion baht. The act is intended to help manage the security of the country's fuel market.
The source said E85 will be downgraded as an alternative fuel after the EFAI terminates the huge subsidy.
The Energy Policy Administrative Committee (Epac) is considering mandating E20 as the primary petrol and downgrading gasohol E10 (gasohol 91 and 95) as alternatives.
But Epac will let each fuel retailer decide independently whether to distribute E85.
Meanwhile, the Energy Business Department is considering phasing out either gasohol 91 or 95 from the country's retail market to cut operating expenses for retailers.
"It will not affect ethanol makers, because the consumption will be absorbed by promoting E20 as the primary petrol," the source said. "E85 accounts for only 4% of the gasohol market in terms of sales volume, while E20 makes up 20%."
The source said biodiesel B10 is still slated as the primary diesel from early 2020, replacing B7 as an alternative diesel, together with B20.