The government is being urged to get more serious in forcing oil traders to buy more cassava from farmers as a feedstock for ethanol production to help stabilise domestic cassava prices.
Anusorn Sangnimnuan, president of the state majority-owned oil refinery and retailer Bangchak Petroleum Plc, said the government should issue regulations to force local oil traders to increase cassava purchases to as much as 30% of ethanol production from 10% now.
Given its cheaper price, molasses currently controls a majority of ethanol production.
"Although cassava-based ethanol's reference price is 26 baht per litre, higher than the molasses-based price of 20 baht, the government needs to be more serious about promoting cassava utilisation to help farmers," he said. "The government uses the state Oil Fund to subsidise (ethanol) prices."
About 6 million tonnes of cassava are being used for ethanol production now. Production is estimated at 25.1 million tonnes of cassava root this year.
Demand for ethanol production is expected to increase by another 1 million tonnes this year. A 500,000-tonne increase would come if the government enforces oil refineries and traders to phase out all pure petrol from pumps nationwide starting in October this year.
The fresh cassava price is now below two baht per kilogramme, down from three baht in the same period last year.
"We have a lot of crops that could be used for fuels, so we should mandate more alternative fuel use to cut down on oil imports of over 1 trillion baht a year," said Mr Anusorn.
The company relaunched biodiesel production from used cooking oil yesterday through a partnership with the Bangkok Metropolitan Administration by opening a centre for reselling used cooking oil at its 25 oil pumps and BMA's 161 fresh markets.
Bangchak started this campaign in 2007 and it started strong with 10,000 litres of used cooking oil reselling per day, but volume dropped sharply to 4,000 litres last year.
Thailand uses 150 million litres of cooking oil per year, most of it reused and disposed of, which causes severe ecological impacts.