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NO. 41 0 WORLD BANK TECHNICAL PAPER for public discussion Public Disclosure Authorized 2\one1Q Successful Conversion tO Unleaded G(asoline in Thailand Public Disclosure Authorized .,. 'I~~' Public Disclosure Authorized Public Disclosure Authorized RECENT WORLD BANK TECHNICAL PAPERS No. 336 Francis, with Akinwumi, Ngwu, Nkom, Odihi, Clomajeye, Okunmadewa, and Shehu, State, Community, and LocalDevelopment in Nigeria No. 337 Kerf and Smith, PrivatizingAfrica's Infrastructure: Promise and Change No. 338 Young, MeasuringEconomic Benefitsfor WaterInvestments and Policies No. 339 Andrews and Rashid, The Financingof PensionSystems in Centraland EasternEurope: An Overviewof Major Trendsand Their Determinants,1990-1993 No. 340 Rutkowski, Changesin the WageStructure during EconomicTransition in Centraland EasternEurope No. 341 Goldstein, Preker, Adeyi, and Chellaraj, Trendsin HealthStatus, Services,and Finance:The Transitionin Central and EasternEurope, Volume I No. 342 Webster and Fidler, editors, Le secteurinformel et les institutions de microfinancementen Afrique de l'Ouest No. 343 Kottelat and Whitten, FreshwaterBiodiversity in Asia, with SpecialReference to Fish No. 344 Klugman and Schieber with Heleniak and Hon, A Survey of HealthReform in CentralAsia No. 345 Industry and Mining Division, Industry and Energy Department, A Mining Strategyfor Latin Americaand the Caribbean No. 346 Psacharopoulos and Nguyen, The Role of Governmentand the PrivateSector in FightingPoverty No. 347 Stock and de Veen, ExpandingLabor-based Methodsfor RoadWorks in Africa No. 348 Goldstein, Preker, Adeyi, and Chellaraj, Trendsin HealthStatus, Services,and Finance:The Transitionin Central and EasternEurope, Volume II, StatisticalAnnex No. 349 Cummings, Dinar, and Olson, New EvaluationProceduresfor a New Generationof Water-RelatedProjects No. 350 Buscaglia and Dakolias, JudicialReform in Latin AmericanCourts: The Experiencein Argentina and Ecuador No. 351 Psacharopoulos, Morley, Fiszbein, Lee, and Wood, Povertyand IncomeDistribution in Latin America:The Story of the 1980s No. 352 Allison and Ringold, LaborMarkets in Transitionin Central and EasternEurope, 1989-1995 No. 353 Ingco, Mitchell, and McCalla, GlobalFood Supply Prospects,A BackgroundPaper Preparedfor the WorldFood Summit, Rome, November1996 No. 354 Subranmanian,Jagannathan, and Meinzen-Dick, User OrganizationsforSustainable Water Services No. 355 Lambert, Srivastava, and Vietmeyer,Medicinal Plants: Rescuinga GlobalHeritage No. 356 Aryeetey, Hettige, Nissanke, and Steel, FinancialMarket Fragmentationand Reformsin Sub-SaharanAfrica No. 357 Adamolekun, de Lusignan, and Atomate, editors, Civil ServiceReform in FrancophoneAfrica: Proceedings of a WorkshopAbidjan, January 23-26, 1996 No. 358 Ayres, Busia, Dinar, Hirji, Lintner, McCalla, and Robelus, IntegratedLake and ReservoirManagement: World BankApproach and Experience No. 360 Salman, The LegalFrameworkfor Water Users'Associations: A ComparativeStudy No. 361 Laporte and Ringold, Trendsin EducationAccess and Financingduring the Transitionin Centraland EasternEurope. 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Copyright i 1998 The Intemational Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433,U.S.A. All rights reserved Manufactured in the United States of America First printing June 1998 Technical Papers are published to communicate the results of the Bank's work to the development community with the least possible delay. The typescript of this paper therefore has not been prepared in accordance with the pro- cedures appropriate to formal printed texts, and the World Bank accepts no responsibility for errors. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusion,sexpressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data in- cluded in this publication and accepts no responsibility for any consequence of their use. The boundaries, colors, de- nominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissem- ination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy portions for classroom use is granted through the Copyright Clearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923,U.S.A. ISSN:0253-7494 Cover photo by Surachart Toemlaphyingyong, Bangkok, Thailand. Philip Sayeg is the managing director of Policy Appraisal Services Pty Ltd in South Bisbane, Queensland, Australia. Libraryof Congress Cataloging-in-PublicationData Sayeg, Philip. Successful conversion to unleaded gasoline in Thailand / Philip Sayeg. p. cm. - (World Bank technical paper; no. 410) Includes bibliographical references. ISBN0-8213-4239-8 1. Gasoline-Thailand-Anti-knock and anti-knock mixtures. 2. Tetraethyllead. I. Title. II. Series. TP355.S22 1998 363.738'74-dc2l 98-23529 CIP CONTENTS ABWSTRDACT .......................... ix ACKNOWLEDGMENTS ............................................... Xi SELECTED WORLD BANK TITLES ON AIR QUALITY .............................................. xii ABBREVIATIONS, ACRONYMS, AND DATA NOTES .. x ... ...................... Xiii GLOSSARY ... XV EXECUTIVE SUMMARYA............... I CHAPTER1: INTRODUCTION ... .................... 3 NOTES ... 3 CHAPTER2: BACKGROUND.......... 5 INTRODUCTION...................... 5 NATIONALENERGY BALANCEAND TRANSPORTATION ENERGY USE ................................8 THAILAND'SENERGY POLICY TO 1991 .9 VEHICLE PRODUCTION, IMPORTS, AND SALES .10 GASOLINE FUELS USED .11 BANGKOK'S AIR QUALITY AND IMPACTS .11 NOTES.15 CHAPTER 3: DEVELOPING A STRATEGY TO PHASE OUT LEADED GASOLINE ........... 17 GETTINGSTARTED .17 STRATEGYFORMULATION .19 SUITABILITY OF OLDER VEHICLES WITH SOFT VALVE SEATS TO USE UNLEADED GASOLINE.22 INDUSTRYRESPONSE AND OTHER ISSUES .22 REFINERYMODIFICATIONS .23 ROLE OFTHE WORLD BANK .24 NOTES.25 CHAPTER4: IMPLEMENTATION. ......................... 27 INTRODUCTION ... 27 iii Successful Conversion to Unleaded Gasoline in Thailand iv KEY INITIATIVES..................... , 27 Pricing ........................ 27 Catalytic Converters ........................ , 29 Unleaded Gasoline Distribution ........................ 30 Marketing and Public Relations Issues .31 Other Initiatives to Assist Implementation .31 Initial Concerns, Monitoring, and S'upplementary Studies .31 STRENGTHENED ENVIRONMENTAL REG1ULATIONS. 31 MARKET PENETRATIONOF UNLEADEDGASOLINE, 1991-95 .34 THHEBENZENE MYTH .38 ACCELERATEDPHASE-OUT OF LEADED REGULARAND PREMIUM GASOLINES.39 OBSERV:ED REDUCTION IN AMBIENT LEAD THROUGH LATE 1996 .41 NOTES.. 41 CHAPTER 5: CONCLUSION AND LESSONS LEARNED. ........ 43 NOTES.44 BIBLIOGRAPHY.................................................... 45 APPENDIX A: NEPO's LIST OF MAKES AND MODELS OF GASOLINE-POWERED VEHICLESTHAT CAN USE UNLEADED GASOLINE ............................................... 49 APPENDIX B: THAILAND'S SPECIFICATIONS FOR AUTOMOTIVE GASOLINE .............. 53 APPENDIX C: DATA ON UNLEADED GASOLINE SALES ....... APPENDIX D: UNLEADED GASOLINE PRODUCTION AND IMPORTATION, 1990-95 .... 57 FIGURES Figure 2.1: National Energy Policy Council and Related Agencies. 9 Figure 3.1: Agencies Responsiblejfor the Environment since 1991 .18 Figuirre4.1: Unleaded Percentage of Premium Gasoline Consumption (1991-95) ... 35 Figure 4.2: Unleaded Percentage of Regular Gasoline Consumption (1993-95) .36 Figure 4.3: Unleaded Percentage of Total Gasoline Consumption (1993-95) . 37 Figure 4.4: Roadside Air Lead Level (1990-96) .42 Figure C1: Consumption of Premium Gasoline (1991-95) .55 Figure C.2: Consumption of Regular Gasoline (1993-95) .56 TABLES Table 2.1: Organization Chart of the Royal Thai Government-Land Transportation' in Bangkok ......... 6 Table 2.2: Number of Vehicles Registered By Type (1984, 1990, and 1995). 7 Table 2.3: Consumption of Selected Petroleum Products (1986-90) (Units: