Thailand Faces Potential Surge in Electricity Prices

(MENAFN) Thailand's electricity tariffs could escalate by as much as 18% for the May-August billing cycle due to increasing liquefied natural gas (LNG) prices connected to the Middle East conflict, a report by a media outlet on Wednesday revealed.

The rise is expected to push up power generation expenses, affecting both households and businesses.

The Energy Regulatory Commission (ERC) is preparing to recommend electricity rates ranging from approximately 3.95 to 4.59 Thai baht ($0.12 to $0.13) per kilowatt-hour, an increase from the current rate of around $0.11, which remains effective until the end of April.

The maximum level within this range would signify an 18% jump, underscoring the mounting financial pressure on consumers in Thailand's import-reliant economy. The nation depends on LNG, alongside gas from the Gulf of Thailand and Myanmar, for nearly 60% of its electricity generation, leaving it vulnerable to fluctuations in global prices.

Market strain has intensified after two QatarEnergy LNG shipments, each transporting 60,000 tons, could not navigate the Strait of Hormuz.

Spot LNG rates have surged to roughly $25 per million British thermal units, nearly twice last year's average, sharply raising fuel expenditures for power producers.

An energy official indicated that the government is preparing for a spike in electricity bills, while extensive subsidies appear improbable due to ongoing fiscal pressures stemming from measures implemented during the Russia-Ukraine war in 2022.

At that time, the Electricity Generating Authority of Thailand (EGAT) and PTT Plc spent heavily to protect consumers from soaring LNG costs. EGAT continues to face losses exceeding $1 billion, while PTT contends with roughly $360 million in remaining expenses.

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