Local Shell unit to set the bar for Asian subsidiaries

Local Shell unit to set the bar for Asian subsidiaries

The Thai unit of Royal Dutch Shell plans to be a training centre for the retail oil business in Asia.

Asada Harinsuit, chairman of the local unit of Royal Dutch Shell, said Thailand was also the Asian launchpad for its new products such as V Power brand, V Power nitro plus, Fuel Save and Club Smart.

The parent company plans to train new staff here before posting to new markets.

Thailand is the first country where Shell launched biofuels such as gasohol, and it is planning to phase out all pure petrol grades locally by November.

Another landmark for Shell Thailand was its introduction of E20 in May 2013, the first subsidiary in Asia to do so, and now the fuel is available at nearly all oil pumps nationwide.

Next year it plans to launch E85 to tap rising domestic demand.

Thailand's upgrading facility for non-oil products as well as its modernising stations is also a novel strategy.

"We are keen on biofuel production and retailing in Asia. We could develop a business model for biofuel business in other countries," said Mr Asada.

Other Asian countries plan to move toward alternative fuel, starting with B5 and B10. Thailand launched E10 in 2001 and biodiesel B2 in 2008.

He said even though Thailand was not totally free from government price intervention, some refined-oil products were relatively free compared with foreign countries where oil price subsidies heavily distorted supply and demand.

Shell plans to develop 400 more oil pumps across Asia per year, such as another 50 units in Malaysia, up from 1,000, another 80 units in the Philippines, 20 units in Oman and 170 units in China.

It operates 4,700 oil pumps in Asia and 45,000 globally.

Last week Shell announced plans to develop another 100 units in Thailand, up from 500 this year, after slowing pump output since the 1997 Asian financial crisis.

However, it may delay development of new pumps in Pakistan, India and Indonesia because of heavy subsidy programmes.

Shell is looking to start a retail oil business in Myanmar because domestic demand is growing.

He said oil price subsidies in many countries would lead to improper consumption in the long term.

"Cheap oil prices are less important than development of infrastructure and education, so hopefully Thailand follows a good model," said Mr Asada.

He said biofuel could play a major role in reducing greenhouse gas emissions and he expects biofuel to spark a major global consumption trend.

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