Thai Government Urged to Reduce Ethanol Glut
Date: 27-Feb-07
Country: THAILAND
Author: Apornrath Phoonphongphiphat
"The government must do something. Someone should be responsible for this," Tat Wanakornkul, executive vice president of Mitr Phol Sugar Corp, Thailand's top sugar miller which also produces ethanol from molasses, told reporters.
Seven ethanol producers said they were left holding 12 million litres (2.640 million gallons) of ethanol after the interim government killed a plan to ban the use of oil-based MTBE in sales of 95-octane gasoline from this year.
Ousted Prime Minister Thaksin Shinawatra's government had announced the MTBE ban last year to encourage the use of ethanol-mixed gasoline amid soaring oil prices.
But Thaksin was overthrown in a bloodless September coup, and the plan shelved in November.
Ethanol production is running at 800,000 litres per day, but daily demand is only 400,000 litres, according to the Thai Ethanol Manufacturing Association.
The government said it feared there might not be enough ethanol and auto makers could not confirm that old cars could run on gasohol.
Seven ethanol factories had ramped up production following the MTBE ban, but Tat said four new plants were under construction.
"There will be 11 ethanol factories by the end of this year and we will have a capacity of 1.4 million litres per day by that time," Tat said.
Khon Kaen Alcohol Ltd, which has a capacity of 150,000 litres per day, had stopped production due to high storage costs, company manager Chompol Kandhavivorn said.
"We cannot run at a loss and I think more will have to stop like us if the government still ignores us," Chompol said.
The association has sent a petition to Energy Minister Piyasvasti Amarananb urging him to impose the MTBE ban by March or more factories would be forced to halt production, hurting farmers who supply feedstock.
The association said exporting the extra supply was not an option because rivals such as Brazil could produce ethanol more cheaply and their markets were protected by tariffs.