Energy committee restricts options to biodiesel B5

Energy committee restricts options to biodiesel B5

The Energy Policy Administration Committee (Epac) has announced that petrol stations will sell biodiesel B5, a mix of diesel and 5% methyl ester derived from palm oil, but will no longer offer biodiesel B7, starting this Saturday.

Although the diesel price remains unchanged, the decision is intended to ease the government’s financial burden amid soaring global oil prices. The government had put a cap on diesel prices at 30 baht a litre since October last year.

According to Epac’s estimates, biodiesel B5 will be sold domestically until the end of March this year.

The mix of diesel with methyl ester aims to reduce dependence on oil and support palm oil prices. However, authorities will need to reduce the proportion of methyl ester as prices of both diesel and methyl ester have increased.

The reference price of methyl ester, also known as purified biodiesel, or B100, currently stands at 57.28 baht a litre, while the ex-refinery price of high-speed diesel is 24.71 baht a litre, according to the Energy Policy and Planning Office (Eppo).

Methyl ester was priced at 46.88 baht a litre in November last year.

On Monday night, a meeting of Epac, chaired by Energy Minister Supattanapong Punmeechaow, agreed to reduce the proportion of methyl ester to 5%

As global oil prices remain at high levels, the reduction will help the state Oil Fund, said Mr Supattanapong. The Oil Fund is supported by 20 billion baht in loans from commercial banks as it subsidises the diesel price cap. 

Epac had earlier postponed the offering of 10% and 20% methyl ester blended diesel, forcing fuel retailers to sell only biodiesel B7 from Dec 1 last year to March this year.

For the sale of biodiesel B7, subsidies would fall to 2.95 billion baht a month, down from 4 billion a month, according to Eppo.

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