Thailand to produce only B7 diesel fuel until next March to reduce diesel prices

Thailand’s Energy Policy and Planning office (EPPO) decided today (Wednesday) to instruct oil refineries to produce just one type of diesel fuel (B7), from December until next March, to lower the price to around 28 baht/litre, and oil traders to maintain the marketing fee at 1.40 baht/litre. The measures are to ease the impact on truck operators as oil prices rise globally.

EPPO Director-General Wattanapong Kurovat, said today that the committee, chaired by Energy Minister Supattanapong Punmeechaow, also decided the retail price at pump will remain at no more than 30 baht/litre.

B7 diesel fuel is mixed with only 7% bio-diesel or palm oil. Currently, there are three types of diesel fuel, B7, B10 and B20, but B7 is the most popular among truckers.

Wattanapong explained that the Oil Fund’s contribution to the diesel fund, coupled with the capping of the marketing fee will help reduce the price of diesel at the petrol station.

He pointed out that the reduction in the proportion of biodiesel in diesel fuel is due to increasing prices of palm oil, currently estimated at 46.88 baht/litre, which will raise the price of diesel by 1-2 baht/litre.

With lower biodiesel content, the B7 price can be reduced by around 50-80 satang per litre.  Subsidies from the Oil Fund will also be cut about 4 billion baht to 3.8 billion baht per month.

Wattanapong said that all parties were consulted before the Energy Police Administration Committee arrived at the decision today, adding that the committee will explore means to help affected refiners.

Truckers, from the Land Transport Federation of Thailand, are demanding that the price of diesel fuel be capped at 25 baht/litre, otherwise they may have to increase cargo transport charges.

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