PTT expects fuel consumption to surge by 20-30 per cent over the New Year holiday from the same period last year. This is due to the larger number of cars on the roads as a result of the government's first-car scheme and the improved economic situation over the last year, which saw large-scale damage from flooding.
Sarun Rungkasiri, vice president of PTT's fuel business, said the firm was committed to ensuring sufficient supply of fuel during this long holiday season and would not raise prices.
Sarun anticipated that competition in the local retail fuel market would be more intense next year after the government abolished the sale of 91-octane petrol at the beginning of the year. Users of 91-octaine will switch to other kinds of fuel, especially gasohol 95 and 91. Gasohol is a mixture of ethanol and petrol.
It is estimated that after 91-octane sales end, gasohol will account for three quarters of all petrol-based fuels used by consumers, which would benefit the local agricultural sector, the environment, and the overall economy. The Department of Energy Business, however, anticipates local petrol consumption will stand at 21.9 million litres per day in the first quarter of next year.
Sarun said that all oil companies were expected to respond to the fiercer competition by improving their services and fuel quality to reinforce their brands. Profit margins, however, are expected to remain at around Bt1.30 per litre.
The government also has a policy to cap the diesel price at Bt30 per litre, keeping market prices quite low.
He said that under the government's measure to abandon 91-octane sales effective January 1, all refineries must stop producing it, while fuel stations would be allowed to sell it for another three months only. This has forced traders to turn to selling other kinds of fuel.
"At PTT, we will turn to selling 95-octane and gasohol E20 instead. We expect to start selling those fuels in January. We expect the retail price of benzene 95 to fall by Bt2 per litre from Bt48 per litre currently. The price reduction will be seen within the next three months," said Sarun.
Consumption of 91-octane fell gradually from 9.4 million litres per day at the beginning of the year to 7.9 million litres per day in September.
According to Siam Commercial Bank's Economic Intelligence Centre (EIC), the consumption of 91-octane petrol currently is 8 million litres per day, or 9 per cent of total fuel consumption by vehicles.
It estimates that about 58 per cent of 91-octane users would shift to gasohol 91, 25 per cent will move to gasohol 95 and 17 per cent will use benzene 95.
The retail prices of gasohol 95 and 91 are lower than 91-octane by Bt6 per and Bt8 per litre, respectively. Therefore, the cancelled production of 91-octane is expected to drive daily consumption of gasohol to 12 million litres.
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Article source: http://www.thethailandlinks.com/2012/12/30/new-car-scheme-to-push-new-year-fuel-usage-up/
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