PTT to convert 600 Thai service stations to B5 from B2

In Thailand, PTT will convert from B2 to B5 biodiesel at its 600 nationwide stations in July, based on the successful acquisition by its Thai Oleo Chemicals of sufficient palm oil for the transition. The company expects to sell 121 million gallons per month of B5, and will triple that demand by July. B5 costs 1.5 cents per gallon less than B2.

PTT competitor Bangchak Petroleum Plc has sold only B5 at 740 service stations since 2004.

The Thai government has established a new, national biofuels organization, which will include members of the government, industry, and private citizens. The Energy Ministry has begin coordination talks with the Commerce and Agriculture ministries, as well as representatives of universities, farmers, car makers and oil retailers. A 21-member panel will supervise policy while a 13-member panel will supervise management of biofuels development from field to wheels. $3 million in palm oil taxes will be used to support the committees.

Last month, Thai Energy Minister Piyasvasti Amranand said that biofuels sales would increase in 2008 to $469 million from $157 million in 2007. He said that the cost of oil imports have fallen 10% as a result of biofuel usage and a stronger currency, adding that gasoline would be replaced by E10 and E20 blends by 2012.

Thai biofuel demand has increased more than 100 percent for 2007; the spur in biofuels sales comes not only from the introduction on E20, but also the implementation of a B2 mandate. Demand is so brisk that major oil traders may be required to establish mandatory strategic reserves of ethanol and biodiesel in addition to conventional fossil fuels.

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