Thailand is on the verge of rolling out a new era in fuel sustainability as it gears up to introduce Euro 5-standard diesel fuel from January 1 of the upcoming year. However, the discussion on pricing for this eco-friendly offering is still ongoing.
Expected to hit petrol stations on May 1, the new initiative will bring environmentally conscious alternatives in the form of B7 and B20 biodiesel blends. These blends incorporate diesel mixed with 7% and 20% palm oil-derived methyl ester, respectively.
While this transition promises a more eco-friendly fuel option, it comes with a price increase estimated at 0.5 baht per liter. To address this, the Energy Policy and Planning Office is actively devising a fresh pricing structure, especially as the existing government subsidy, maintaining diesel prices below 30 baht per liter, is slated to conclude by December.
DOEB Director-General Nanthika Thangsupanich confirmed that oil refineries and traders are all set to produce and vend Euro 5 diesel. Recent investments totaling 50 billion baht have been poured into six refineries to upgrade from Euro 4 to Euro 5 diesel.
Ahead of the complete shift to Euro 5 diesel, petrol stations will continue selling the current Euro 4 diesel for an interim period of 3-4 months. This transition coincides with a noticeable 5% reduction in diesel consumption over the initial ten months of the current year, averaging 68.5 million liters daily, primarily due to decreased usage in power generation.
Despite the decline in diesel usage, the overall fuel consumption in Thailand surged by 1.3% this year, showcasing marked upticks in gasoline, gasohol, jet fuel, and liquefied petroleum gas (LPG) demand. Conversely, fuel oil consumption witnessed a downturn, while compressed natural gas usage remained relatively steady, buoyed by state-backed subsidy programs.