Saturday, August 18, 2007

Thailand has decided to impose an excise tax rate of 25%

Thailand has decided to impose an excise tax rate of 25% on cars capable
of running on 20% ethanol-blended gasoline from January 1, 2008, onward,
lower than a tax of 30% imposed on normal cars in a bid to boost demand for
ethanol, a government official said Wednesday.
The new tax rate is higher than the government's original plan of
imposing a 20% tax on E20 cars, but that tax rate would have been effective
only from January 2009, he said. Natural gas-fueled vehicles are charged a tax
rate of 20% in Thailand.
E20 cars are scheduled to be available from early next year onward, the
official said. According to estimates by the excise department, some 30,000
E20 cars are expected to be made available next year by manufacturers
including Toyota and Honda.
Thailand currently sells 10%-ethanol blended gasoline, also known as
gasohol in the kingdom. Gasohol sales account for around 20% of total gasoline
sales of 24 million l/d in the country.
Local refiner Bangchak is expected to start supplying 20% ethanol-blended
gasoline from next year, the official said.
Sales of E20 will help ease some of Thailand's ethanol oversupply
problem. The country's ethanol stocks have surged dramatically since the
government backtracked on its plan to switch all 95 RON gasoline to 10%
ethanol-blended gasoline, also known as gasohol 95, from early 2007.
Stocks are currently at levels high enough to cover demand for a few
months and have prompted several producers to slash operating rates and even
suspend operations altogether.
--Mriganka Jaipuriyar, mriganka@platts.com

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