Samak wants to solve energy crisis with… cheap russian diesel

Here is the latest bright idea from Samak, the so called “Prime Minister of Thailand” (day after day, I find it more difficult to use this expression… I need quotation marks…).

Consider this :

The premier said Russia has agreed to sell 300,000 tonnes of low-price diesel to Thailand per month. Once the project is signed, the Russian diesel will be sold to members of all cooperatives for 8 baht per litre below the regular pump price.

At present, the diesel pump price is 44.24 baht per litre.

The first lot of Russian diesel is expected to arrive in Thailand during the next two months and will be sold only to cooperatives, he added.

The Russian fuel will be distributed through farmer, transport and fishery cooperatives, he said. (Bangkok Post)

300 000 tons per month… 1 liter of diesel = 0,87 kg… Therefore, we are talking (roughly) about 344 000 x 1 000 liters per month = 344 millions of liters.

Do you know how many liters of diesel are consumed in the country, per month ?

Average 1 601 millions (from january to may 2008, source EPPO, table 2.3.2) = 51 millions per day.

Therefore, the bright idea of Samak would be equal to 21 % of the total monthly consumption of diesel.

But wait a minute… Why the russians would make a gift to Thailand with a “friendly price” ? There is a trick actually… the russian diesel is cheap because its quality is… low.

Mr Samak said that although the quality of Russian fuel is “slightly below” that of diesel currently on the market, it will sell for about 8 baht per litre below the current retail price. (Bangkok Post)

Mr. Samak claims that the current quality of diesel from Russia today is comparable to the quality of diesel, consumed in Thailand five years ago. (PRD)

By the way, we can admire the slightly translation differences between Bangkok Post and PRD… 😉

Anyway… negociations are underway… First, let’s see if Samak is able to close the deal… And the technical issues about the quality are not yet solved.

And last but not least… who will benefit from such “cheap diesel” ? And for how long ? And will this new program replace the current 3 THB per liter subsidy for transport companies, fishermen ? We can already forecast some nice quarrels, scandals and other thai goodies… 😉


[the subsidy for diesel for some corporations has already created some problems, read here]

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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