The Excise Department has tweaked the biodiesel excise tax structure by expanding the fuel brackets to six from two to provide flexibility for manufacturers, in line with efforts to thin the nation's palm oil supply.
According to the new structure, biodiesel containing fatty acid methyl esters of up to 4% are taxed at 6.44 baht per litre, 4-7% at 5.99 baht a litre, 7-9% at 5.93 baht per litre, 9-14% at 5.8 baht a litre, 14-19% at 5.48 baht per litre and 19-24% at 5.153 per litre, said Sodsri Ponguthai, deputy director-general.
The previous tax structure covered B7, a biodiesel with 7% methyl ester from crude palm oil blended with diesel, and B20.
The Energy Ministry plans to set up biodiesel B10 as the primary diesel available at petrol stations, alongside B7 in a move to absorb a surplus of crude palm oil and tackle PM2.5 pollution.
Apart from B7 and B10, biodiesel B20 is available at 174 Bangchak and 33 PTT petrol stations nationwide. Three types of gasoline, gasohol E10, E20 and E85 are also available at petrol stations.
The ministry estimates once B10 becomes the preferred choice, 2.5 million tonnes a year of crude palm oil will be consumed, up from 1.4 million tonnes used for B7.
The National Oil Palm Policy Committee, chaired by Deputy Prime Minister Prawit Wongsuwon, earlier this month approved the Electricity Generating Authority of Thailand's purchase of 200,000 tonnes of crude palm oil.
The move is aimed at propping up the domestic prices of fresh palm nuts and crude palm oil. The goal is to push the price up to 2.80-3.00 baht per kilogramme for fresh palm nuts and 16 baht/kg for crude palm oil in May, from 2.19 baht/kg for fresh palm nuts and 15.31 baht/kg for crude palm oil in April.
The new excise tax structure for biodiesel will offer refiners flexibility in adjusting the diesel blend percentage to be consistent with palm oil supply at that time, Mrs Sodsri said.
To comply with the new structure, the Excise Department raised the tax on B7 by one satang a litre to 5.99 baht and B20 by 0.001 baht per litre to 5.153, she said.
The tax hike will not have a significant impact on the department's revenue, 140 billion baht of which a year is derived from diesel, said Mrs Sodsri.