18/3/07 BANGKOK,(TNA) – The government may allow imports of palm oil to produce bio-diesel due to a shortage of palm oil in Thailand, said Energy Minister Piyasvasti Amranand.

Local production of palm oil for use in the manufacturing of the alternative fuel may be insufficient this year, he said, so the Energy Ministry may ask the Commerce Ministry to allow palm oil imports to refine into bio-diesel. The importers must ensure that their bio-diesel price must not exceed market price, Mr. Piyasvasti said.

Thailand's government-sponsored Oil Fund may have initiate incentives to encourage palm oil planters to grow more trees here, Mr. Piyasvasti said.

Imports of palm oil may have to be made carefully as they may pose a negative impact on the bio-diesel production plan by Thai Oleochemicals, a subsidiary of PTT Chemical Pcl., scheduled to start late this year with a production capacity is 600,000 litres daily.

In an attempt to encourage more motorists to switch to using bio-diesel, Mr. Piyasvasti said his ministry had a clear policy to further increase the price spread of bio-diesel B5 formula lower than diesel price by more than Bt1 per litre compared to just over Bt0.70 a litre now.

He said a feasibility study is being conducted on having only bio-diesel B5 available in the Thai market, which will automatically help boost sales of alternative energy. (TNA)