The Energy Policy Administration Committee (Epac) decided yesterday to widen the price gap between normal diesel and biodiesel B20 from three baht to five baht per litre to encourage truck and bus operators to use more B20.
This is the third move taken by the committee to absorb the surplus of crude palm oil (CPO).
Nantika Thangsupanich, director-general of the Energy Business Department, said Epac aims to reduce the huge surplus of CPO.
The change in B20's retail price will be carried out from Dec 1 to Feb 28.
"The department aims to absorb 31,300 tonnes of CPO through this policy," Ms Nantika said.
Earlier, the Office of Agricultural Economics reported that CPO stock as of September stood at 375,591 tonnes, higher than the normal level of 250,000 tonnes a year.
The Energy Ministry announced in late October an increase in the methyl ester content of biodiesel B7 from 6.6% to 6.8%, effective Nov 1, aiming to absorb 62,000 tonnes of CPO.
On Monday it was announced that surplus CPO would replace bunker oil and diesel for power generation at two state-run plants in Chachoengsao and Ratchaburi.
Regarding the CPO surplus, PTT Plc and Bangchak Corporation have announced their readiness to implement a plan for related infrastructure of petrol stations and logistics systems.
The government is aiming to absorb 1.7 million tonnes of CPO a year, up from 1.3 million tonnes.
Both energy companies have also discussed encouraging several oil traders to join the scheme by setting up commercial sales of B20 for buses and trucks.