The department is awaiting the results of a 100,000-kilometre field test by Toyota on B10, or diesel with 10% biofuel. B10 performed well in an earlier pilot project and laboratory testing, showing no adverse engine effects.

“Although the present palm oil plantation area nationwide is sufficient for B5, or 5% biodiesel, production in 2011, we must prepare for boosting the methyl ester [biodiesel] content by expanding the plantation area,” said Mr Peerapol.

He assured that developing greener biodiesel would not result in a shortage of palm oil in the food sector.

Thailand introduced B2 biodiesel last year and B5 early this year in a voluntary scheme among oil traders.

High-speed, or 100%, diesel has been phased out completely, replaced by B3 in June. B3 in turn will be replaced by B5 in January.

Energy experts say another global oil price crisis may occur after 2012 once the world economy has fully recovered.

Manoon Siriwan, a former senior executive vice-president of Bangchak Petroleum, said oil might jump above US$100 per barrel after 2012, from around $75 now. “Sometime in the next couple of years we could see oil go beyond $120 a barrel, maybe even reaching $150,” he said.

Mr Manoon said upstream petroleum production costs were rising in light of stricter environmental protection measures following the catastrophic BP spill in the Gulf of Mexico.

“Only by developing alternative fuels and consuming energy efficiently can we curb another oil crisis, so we have two years left for the quick development of alternative fuels,” he said.

Brazil is a good example, as widespread use of ethanol meant it was the only country to emerge unscathed from the 2008 oil price crisis, he said, adding that developing alternative fuels is a more sustainable solution than providing subsidies.

Vitaya Wangchitaruck, an executive vice-president of PTT, acknowledged the trend but said the price would still average about $75 a barrel in the second half of this year.

Anon Sirisaengtaksin, the chief executive of PTT Exploration and Production Plc, predicts global oil demand and supply will be balanced from 2012 onward unless huge new reserves are discovered.

The cost of equipment and rig production will rise by 40% from now, which will in turn be reflected in the cost of oil, said Mr Anon.