Ministry to ease blow of subsidy ending
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Ministry to ease blow of subsidy ending

Biofuel price set by market in 2027

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As of October this year, the prices of ethanol and methyl ester were 32.32 and 35.35 baht a litre, respectively, compared with ex-refinery prices of gasoline and diesel at 20-21 baht a litre. Somchai Poomlard
As of October this year, the prices of ethanol and methyl ester were 32.32 and 35.35 baht a litre, respectively, compared with ex-refinery prices of gasoline and diesel at 20-21 baht a litre. Somchai Poomlard

The Energy Ministry is planning to launch measures to soften the impact of expiring biofuel price subsidies in 2027, as the fuels become more expensive, affecting palm and sugar cane growers.

The farmers sell their produce to factories, which produce two types of biofuels: ethanol from sugar cane-derived molasses and palm oil-derived methyl ester.

The prices of ethanol, which is mixed with gasoline to make gasohol, and methyl ester, which is blended with diesel to make biodiesel, are currently higher than refined oil. This prompted authorities to spend some of the state Oil Fuel Fund to subsidise biofuels to promote their usage.

"Once the subsidy programme expires, the biofuel-blended oils will become more expensive," said Energy Minister Pirapan Salirathavibhaga.

This will economically damage farmers in the future, so the government needs to find ways to help them, he said.

Mr Pirapan said he wants the Energy and Industry ministries to jointly draft a new law on palm and palm oil, hoping it can help palm growers deal with the impact following a rise in methyl ester prices.

The minister did not elaborate on how the law can help palm growers, saying only it should benefit the farmers in the same way the Sugar Cane and Sugar Act does.

The Act encourages cane farmers and sugar millers to work with the government to manage sugar cane plantation and sugar sales in domestic and overseas markets.

"We expect to set up a joint panel comprising officials from the two ministries within two weeks to work together," said Mr Pirapan.

As of October this year, the prices of ethanol and methyl ester were 32.32 and 35.35 baht a litre, respectively, compared with ex-refinery prices of gasoline and diesel at 20-21 baht a litre, according to energy officials.

Authorities have subsidised biofuel prices in order to reduce the expense of oil imports.

"The move was later viewed as helping farmers, though this is just a by-product of the policy, not a primary aim," he said.

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