Prime Minister Srettha Thavisin has instructed PTT Plc and Bangchak Corporation Plc (BCP) to buy pure biodiesel at the Energy Policy and Planning Office (EPPO)’s reference price to shore up palm oil prices.
Government spokesman Chai Wacharonke said on Wednesday that Srettha issued the instruction after learning that PTT and BCP have been buying 100% biodiesel (B100) at 27 baht per litre, lower than the EPPO reference price. The Finance Ministry is a major shareholder of BCP.
Oil companies mix B100 biodiesel with petroleum diesel to make B7 and B20 biodiesel dispensed at petrol stations. The B7 variety has 7% biodiesel content, while the B20 has 20%.
Chai said the purchase of B100 biodiesel at prices lower than the EPPO’s reference price causes a “chain reaction in the supply chain of biodiesel and forces the price of palm oil to fall”.
The spokesman said if the PTT and BCP bought the B100 biodiesel at the EPPO’s reference price then the price of the oil palm fruit could rise to between 4.7 and 4.9 baht per kilogram.
The EPPO updates its B100 reference price every week based on the price of oil palm fruit and raw palm oil.
For the week of June 3-9, the reference B100 price was set at 35.2 baht per litre, down 0.09 baht per litre from the previous week.
Chai added that Srettha has also instructed the Commerce Ministry to ensure that middlemen and oil mills buy oil palm from farmers at fair prices.
