Gasohol's price advantage had been Bt2.40 and Bt2.90 against 95- and 91-octane and petrol, respectively.

Gasohol prices can be maintained because the Oil Fund is reducing the required contribution from Bt1 to 60 satang per litre, effective today.

While pricing has been the overriding strategy to boost gasohol consumption, the Energy Ministry sees a deterrent in the limited number of service stations carrying the alternative fuel.

The ministry will rush to help provincial stations clean up their fuel tanks for gasohol distribution. It will also continue to reassure motorists of the compatibility of the new fuel with their engines. Piyasvasti hopes that PTT's takeover of the Jet station chain, which should be completed soon, will expand distribution channels for gasohol.

He attributed the latest price increase to production cutbacks of 1.2 million barrels per day by major oil-exporting countries, as well as violence in Nigeria which choked supply by 800,000 barrels.

These factors have put pressure on global oil prices at a time when major refineries have scheduled shutdowns for annual maintenance and petrol demand is on the rise. US reserves are expected to fall to their lowest level in 20 years.

Piyasvasti said his ministry was closely monitoring the situation in the Middle

East.

"Under this situation, we can campaign for higher gasohol consumption, as gasohol is available as a choice to reduce motorists' burden," he said.

Yodphot Wongrakmit, a senior director of Bangchak Petroleum, expressed confidence that the greater divergence in gasohol and petrol prices would encourage more drivers to switch over, as they could save Bt130 to Bt140 with every fill-up.

"Consumers should turn to gasohol since petrol prices tend to head up in May and June when it's the travel season in the US and Europe and petrol demand will zoom," he said.

Bangchak, which has been at the forefront in pushing gasohol, expects the growing price advantage to drive up gasohol-95 sales by 3-4 per cent and gasohol-91 sales by 7-8 per cent.

Manoon Siriwan, an oil expert, said motorists had been reluctant to turn to gasohol out of concern for possible internal damage to their engines.

"The Energy Ministry should work harder to convince them [that gasohol is safe] and should find ways to reduce the availability of 95-octane petrol," he said.