Resistance from oil refining and ethanol production executives poses challenges to Thailand’s government as it seeks to boost the country’s strategic petroleum reserve (SPR).
The initiative to expand the SPR under the 2024 oil plan, spearheaded by Energy Minister Pirapan Salirathavibhaga, underscores the crucial need for bolstering national oil security.
Mr. Pirapan advocates for Thailand to upsurge its oil stockpiles, encompassing both crude and refined oils, aiming to attain a 90-day coverage compared to the current 50-day reserve. This strategic move aims to secure sufficient oil reserves in case of unforeseen logistical disruptions by key suppliers.
The oil plan states that in the previous year, over half of Thailand’s total crude oil imports hailed from the Middle East, with notable percentages from the US, Malaysia, Indonesia, and other sources.
Should the proposed SPR expansion receive approval, it would lead to a substantial 10 billion-liter augmentation in the existing oil reserves, as outlined by an unnamed representative from an oil refinery firm.
However, financial constraints impede the feasibility of procuring such a substantial oil volume and developing requisite storage infrastructure, according to the source. With the looming fiscal constraints in the 2025 budget, allocation to various projects, including a digital money disbursement initiative, poses an additional hurdle.
The complexities of enhancing the SPR are magnified by the financial considerations and prior investments made by oil companies in meeting environmental standards. Furthermore, stakeholders from the sugar cane sector advocate for prioritizing ethanol utilization to reduce reliance on fossil fuel-based oils.
The incorporation of ethanol into gasohol blends and palm oil-derived methyl ester into diesel offers a viable strategy to enhance national oil security with locally sourced raw materials.
As deliberations continue through a public hearing until July 12, the 2024-2037 oil plan is slated to be enforced, with the Department of Energy Business conducting a comprehensive study on the SPR proposal.
Thailand’s reconsideration of boosting its SPR stems from past recommendations by the International Energy Agency; however, previous attempts were halted due to an oil surplus in 2014 fueled by significant shale oil production in the US.
