The Energy Ministry has set a retail price for the E85 flex-fuel at 20.15 bath per liter, or 46 per cent lower than a regular gasoline.

As the result, the pump prices for the E85 ethanol will be sold at around 17.54 and 18.74 baht a liter cheaper than the premium benzene.

The ministry said it is also looking to cut the E85 excise tax for vehicles with engine displacement of less than 200 cc to be lower than of the E20 vehicles by 20-25 per cent to instigate the E85 vehicles import.

According to the plan, the Energy Ministry expects to see around 1,000 E85 vehicles hit the road between 2008 and 2009, effectively increasing the country’s demand for ethanol by 4,000 liters per day.

The policy is aiming to reduce the gap between ethanol oversupply of 1.5 million liters per day and its demand of 955 thousand liter per day.

Ethanol oversupply was currently added into the government’s concern list-items. By the end of the year, there will be three more ethanol plants set to open operation at full capacity, adding more than 980 thousand liters of ethanol to the market daily.

Ford, Volvo, and GM are only three automakers that announced readiness for the production or the import of the E85 vehicles.