Bangkok Post - Jun 13 11:34 AM - Pumps across the country will addanother 40 satang per litre to gasoline (one baht = 100 satang) and dieselprices today, as the cost of oil prices continue to rise on the worldmarkets.

Apisith Rujikiatkamjorn, PTT's senior executive vice-president for the oilbusiness, said the ``endless'' increases in world prices forced thecountry's largest oil company to boost pump prices.

``Oil prices are tending up further, because of the higher cost of worldoil products. Recently, benzene prices in Singapore rose $1.30 per barrelto US$58.33, while diesel surged by $2 to $68.46,'' he said.

Fuel at PTT pumps will be generally lower than at most other stations. Thecompany left its prices fixed when all other companies last boostedgasoline and diesel costs. Now, PTT will raise its pump prices by 40satang per litre today along with all others, to keep pace.

The new PTT prices in Greater Bangkok will be 22.94 baht per litre forpremium gasoline, 22.14 baht for regular, 21.44 baht for gasohol 95, 18.99baht for diesel and 18.49 baht for biodiesel. Costs at most other pumpswill be 40 satang per litre above these.

According to the Energy Policy and Planning Office, the state oil fund'sspending to date has passed 89.3 billion baht to subsidise petrol anddiesel prices _ 82.34 billion baht on diesel, 2.67 billion on premiumgasoline and 4.30 billion baht on regular gasoline.

Tiraphot Vajrabhaya, chairman of Shell Thailand, said oil companies didnot enjoy any profits from oil trading in the past month, as import pricesrose and pump prices remained the same.

The oil companies were still losing one baht per litre on diesel, despiterecent price rises, he said. Since stations normally operate on amarketing margin of 90 satang per litre, diesel prices may have to beraised by at least 1.50 baht per litre just to ensure survival.

In a related development, the CP Group announced it plans to sell productsfrom its biodiesel project to PTT Plc, in the hope that the marketefficiency of the state energy group would bring its two-billion bahtdiesel project to market.

Montri Congtrakultien, president of the CP Crop Integration BusinessGroup, said PTT had approached his company with a proposal to do marketingfor biodiesel output. It likely would take a year for PTT to work outdetails of the co-operation.

Besides PTT, foreign investors from the United States, Germany, France andJapan have shown interest in being partners in the project, he said.

CP Group, the country's leading agribusiness, says it is ready to enterthe energy business, in particular with biodiesel, since the projectinvolves input from the farm sector. The group is also looking intoproduction of tapioca, a crop commonly used for producing biogas andgasohol.

Mr Montri said CP has planned to bid for a licence to operate thegovernment-promoted biodiesel project using palm oil in a fully integratedand vertical system including an oil palm plantation and refinery.

Government policy is to encourage the private sector _ or agovernment-sponsored special-purpose vehicle (SPV) _ to set up anintegrated biodiesel complex, consisting of an oil palm plantation,crushing and refining plant and a blending facility. Each complex wouldproduce a minimum of 100,000 litres of biodiesel per day. Estimates aresuch complexes would require an initial investment of 770 million bahtapiece.

The government's biodiesel standard will be known within this year, whilea biodiesel pilot project, with an output of 300,000 litres per day, couldbe online next year. The government aims for an output of 8.5 millionlitres of biodiesel per day in 2012.

Mr Montri said CP was searching for a suitable site for the 60,000-raicomplex. It also needs drought-resistant, high-yield palm, and issearching for a seeds supplier overseas. Palm output in Malaysia is theworld's highest _ four tonnes per rai, compared with 2.6-2.7 tonnes inThailand.

``It will take us about five years to research and develop proper seedsfor Thailand's climate,'' Mr Montri said.