The government's plan to develop Thailand's strategic petroleum reserve (SPR) faces resistance from executives in the oil refining and ethanol production sectors, who point to financial challenges.
A plan to have the SPR, which was upgraded in the 2024 oil plan, was initiated by Energy Minister Pirapan Salirathavibhaga, who stressed the need to enhance national oil security.
He wants Thailand to increase its oil reserves, both crude and refined, to cover 90 days of use, up from the current 50 days. This should ensure the country has sufficient oil supplies in the event of unforeseen delivery disruptions by major suppliers, said Mr Pirapan.
Last year, 53% of total crude oil imports came from the Middle East, with 11% from the US, 10% from Malaysia and Indonesia, and the remaining 26% from other regions, according to the oil plan.
If the SPR plan is approved, the total oil reserves would increase by 10 billion litres beyond current levels, said a representative from an oil refinery company who requested anonymity.
It is hardly possible for the government and oil companies to buy such a huge amount of oil and invest in oil storage facilities because of budget constraints, said the representative.
If the government wants to have the SPR, it needs a large amount of money, but in fiscal 2025, which starts on Oct 1, a substantial proportion of its budget is already set to be allocated to other projects, including the 10,000-baht digital money handout, the source said.
It is difficult to ask oil traders and oil refinery operators to develop the SPR, said the source.
Many oil refineries have already spent large amounts on upgrading their diesel quality to meet Euro 5 environmental emission standards, which have been in effect since January.
A representative from the sugar cane crushing industry who requested anonymity said he wanted the government to focus on using more ethanol to replace fossil fuel-derived oil.
Sugar cane is a raw material for ethanol, which is mixed with gasoline to make gasohol of different formulas.
Blending ethanol with gasoline or mixing palm oil-derived methyl ester with diesel can increase national oil security because the raw materials can be sourced in Thailand, without worrying about disruptions in global crude oil supply, the source said.
Authorities are gathering opinions on the oil plan during a public hearing, which runs until July 12.
The oil plan is set to be enforced from 2024 to 2037.
The Department of Energy Business was instructed by Mr Pirapan to conduct a study on the SPR plan.
In 2013, the International Energy Agency prompted Thailand to consider having the SPR, but the proposal was shelved because of a surplus of crude oil in 2014, thanks to massive production of shale oil in the US.