How much would you be prepared to pay for petrol? Would, say, Bt50 per litre be too much? Would you shell out Bt2,000 for a one-way drive from Bangkok to Pattaya?
The painful reality of increasing fuel costs has been a large part of our daily news for several years, but it’s still something many people refuse to take into account when buying a car. It’s as if turning a blind eye will make the problem go away. Be assured, it will not.
After the government removed its subsidies from motor fuel a few years ago and the cost of filling the car shot up, people raved and ranted about the ruinous impost, but much as one might recover from a broken heart, they have learned to live with the impact; the ruckus has calmed down, and many are now considering their alternatives.
Thailand’s alternatives are compressed natural gas (CNG), gasohol and biodiesel. At one stage, consumers turned to liquefied petroleum gas, but that only raised the spectre of more imports and, basically, the same problem all over again. So where is the government leading us? Which businesses need to be promoted to ensure affordable fuel security in the future? The answers come from the Energy Ministry’s Energy Business Department.
“Our primary target and collective goal is obviously to reduce Thailand’s heavy reliance on imports, so that we can be more independent and not so susceptible to problems that take place in the oil-producing nations of the world,” says department director-general Metta Banturngsuk. “We’re turning to alternatives like gasohol, which can be produced from sugarcane, and CNG, which is available in Thailand. Biodiesel is another option, because it can be produced from palm oil, which can be cultivated. The more locally produced alternatives we can provide, the more we can cut back on imports.”
The Energy Business Department has three main responsibilities. The first is the safety of all those in the energy business. This involves ensuring that contractors obey the law when building petrol stations and other energy-related facilities and that safety measures are observed when operating these facilities and businesses.
The second responsibility is to ensure a steady flow of energy to consumers without any disruption or shortages of supply. For example, the department must ensure that energy-producing companies observe a legal requirement to hold reserves equal to 36 days’ supply.
Finally, the department must ensure that engines running on Thailand’s roads are operating smoothly, not only at present, but also in the future. It also must disseminate updated information to all in the energy business.
“Automobiles account for about 38 per cent of the country’s energy use. Although it is not a very large figure, it is very significant, and even small changes can add up to a big effect,” Metta says. “Decreasing pollution is also one of our major concerns, which means we must ensure high oil quality all over Thailand. Our decision to provide consumers with the options of gasohol E10 and CNG is definitely a step in the right direction.”
The department believes that rather than having one fixed choice, which tends to restrict businesses, it is better to offer consumers more than one alternative. Those who choose not to give up petrol completely can turn to gasohol. Those who turn their backs on it can opt for CNG. This strategy is unlike that in Brazil, where the government focuses entirely on ethanol, the “e” part of gasohol. Thailand has both alternatives readily available in nature, so the strategy is to diversify; to spread the impact.
“Currently we plan to have more than 50,000 heavy vehicles in Thailand running on natural gas in the next three years. These will include high-fuel-consumption vehicles like trucks and buses. Although this does not sound like a large figure, it is important to realise that these vehicles equal
1 million passenger cars, and they cover almost 50,000 kilometres a month, a distance usually travelled by passenger cars in one year,” Metta says.
Implementing the use of compressed natural gas in these heavy vehicles is also easy because they need fuelling stations only at the beginning and end of their journeys, and not along the way.
Thailand’s current consumption of gasohol is 5 million litres a day. The 10-per-cent ethanol content in current gasohol supplies means the country saves 500,000 litres of petrol imports every day. This adds up to 182 million litres a year. The impact on diesel will be even greater next May, when the government makes B2 diesel compulsory. B2 diesel will have a 2-per-cent content of high-quality biodiesel. Automobiles of many descriptions use 50 million litres of diesel per day in Thailand, so the Kingdom will shave imports by 1 million litres a day by using B2 diesel, or 365 million litres of diesel per year.
“There are also plans to introduce E20 [gasohol containing 20-per-cent ethanol] next year,” Metta says. “The ministry will offer a 5-per-cent tax incentive for all auto-manufacturers who produce vehicles capable of using E20. We have already received confirmation from some auto companies that combined together they will be able to sell approximately 30,000 units in total by taking advantage of the incentive.
“The question now is when we will get to the next step of ethanol, which is E85. It is far too early to say that, and I don’t see it happening anywhere in the near future,” he says. The department has also focused on taxis, which account for a large slice of the total distance travelled by vehicles on Thailand’s roads. Taxis are now able to convert to CNG free of charge. This is partly because taxis can no longer be registered in Thailand unless they run on CNG.
“In the long run, turning away from crude oil must be our focus. The oil-producing nations of the world control oil prices, and we need to decrease our dependency on crude oil,” Metta says. “Turning to something like CNG and ethanol will make Thailand more stable economically. CNG can be imported as liquified natural gas from many foreign sources, as there are plenty of countries producing it, and it is very unlikely to turn into the kind of monopoly that the oil industry has become.”