Palm oil prices on the agenda
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Palm oil prices on the agenda

The cabinet on Tuesday ordered working panels be set up to tackle oil palm prices in five southern provinces while instructing the Electricity Generating Authority of Thailand (Egat) and the Energy Ministry to accelerate purchasing additional crude palm oil to help boost domestic palm oil prices.

Rachada Dhnadirek, a deputy government spokeswoman, said  that the cabinet acknowledged the national oil palm management guidelines approved by the National Oil Palm Policy Committee, which met on June 4.

The national oil palm management guidelines call for establishment of subcommittees and working panels to address problems in five southern provinces: Chumphon, Surat Thani, Krabi, Phangnga and Nakhon Si Thammarat.

The Energy Ministry via Egat is also required to speed up completing the purchase of the remaining 37,550 tonnes of crude palm oil (CPO).

The National Oil Palm Policy Committee on May 2 ordered Egat to purchase 200,000 tonnes of CPO as part of efforts to absorb surplus volume and increase crop prices.

The CPO is used for power generation at Egat's Bang Pakong plant. Egat already bought 62,450 tonnes in the first lot of 100,000 tonnes.

According to Ms Rachada, the Energy Ministry through Egat is also entrusted to consider buying an additional 100,000 tonnes of CPO to keep in state stocks for use as fuel at Egat's Bang Pakong plant if domestic oil palm prices fail to improve.

The ministry was also told to rev up promoting the use of biodiesel B10 as the primary diesel among consumers, car makers and petrol stations.

The ministry has mandated biodiesel B10 as the primary diesel, replacing B7, effective from early 2020.

Widespread consumption of B10 can absorb a surplus of CPO at roughly 150,000-200,000 tonnes a year, according to Energy Ministry estimates.

In addition, the cabinet assigned the Budget Bureau to consider allocating 372.56 million baht to the Internal Trade Department to install CPO automatic level gauges as approved by the cabinet on Feb 11.

The automatic level gauges will enable regulators to observe real-time information for CPO stocks, giving them verifiable data to help with decision-making and to prevent smuggling.

Ms Rachada said the Energy Ministry reported on Tuesday that diesel consumption in 2020 is projected to drop by 8.2% because of the pandemic.

The Energy Business Department said diesel consumption last year rose 1.8% to 64.4 million litres a day, while benzene use grew 3.7% to 32.2 million litres a day. Jet fuel consumption edged up 0.8% to 19.3 million litres a day.

LPG use dipped 0.2% to 17.8 million kg a day, and NGV use fell 11.7% to 5.4 million kg per day.

In a separate development, the cabinet on Tuesday approved a 1.45-billion-baht loan to Myanmar to improve that country's power facilities, including substations.

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