Thai ethanol plants cleared to sell to medical sector

Thai ethanol producers are now allowed to sell alcohol to hand sanitiser and cleaning agent manufacturers without seeking government permission.

The energy ministry announced the change as part of measures in response to the Covid-19 outbreak. Only a small number of plants previously could sell their product to companies outside the fuel industry, but the Thai government is seeking to reassure the public that enough ethanol is available for medical purposes.

The association of Thai sugar mills does not expect producers to significantly adjust the volume of ethanol they sell to the medical industry, currently around 2mn litres/d. But with Thai sales of ethanol-blended gasoline, or gasohol, down to around 4.1mn l/d from an average of 4.4mn l/d in the months before the coronavirus outbreak, plants are likely to have some surplus ethanol available should it be required.

There are also unconfirmed reports of plans to delay ending sales of lower ratio ethanol blended gasoline until September this year. The government initially intended to discontinue 91 octane E10 gasohol after 1 January 2018, a measure keenly anticipated by ethanol producers as it would lead to increased sales of higher ratio gasohol grades E20 and E85 and push up overall ethanol consumption. The energy ministry expected E20 sales to double following the rollback of E10.

But the cut-off was postponed until June 2020 among uncertainty as to whether current supply volumes can support the higher blends. To ensure plentiful supplies during the current coronavirus crisis, E10 may now still be available to consumers until September this year.

Thailand has no legal mandate for gasoline blending but relies on various consumer incentives to promote uptake. Its E20 and E85 compatible vehicles enjoy excise tax reductions and subsidies ensure gasohol sells at a discount at the pump, although the latter will gradually reduce until 2022 under the State Oil Fund Act. Thailand's 95 octane gasoline retailed at an average price of 24.65 baht/l ($0.76/l) on 15 April, while 91 octane E10 gasohol sold at Bt16.78/l and E20 gasohol at Bt15.24/l, according to data from the oil ministry.

Thailand currently has 26 plants producing around 6.3mn l/d of ethanol, of which 4.4mn l goes to fuel blending, according to the energy ministry.

By Lauren Moffitt