A wind turbine in Phuket, Thailand. (Photo: Wikimedia Commons)
After amending the electricity pricing structure and obtaining cabinet approval, the Energy Regulatory Commission (ERC) of Thailand announced on Jan 10 that the electricity price for January to April this year is set at 4.18 Thai Baht per kWh (about $0.12 USD), significantly lower than the initially proposed 4.68 Thai Baht. This decision brings relief to many industry players.
Prior to the implementation of the new electricity prices, households consuming less than 300 kWh per month were eligible for a government subsidy, resulting in a basic electricity rate of 3.99 Thai Baht per kWh. At the end of last year (2023), the Energy Regulatory Commission (ERC) proposed an increase in electricity prices to 4.68 Thai Baht per kWh, citing international fuel costs and addressing the financial challenges of the state-owned Electricity Generating Authority of Thailand (EGAT). However, the proposed significant hike sparked public outcry, prompting even Prime Minister Settha Thawisin to intervene and provide reassurances.
ERC Secretary-General Khomgrich Tantravanich stated that the reduction in the electricity price hike was primarily due to a decrease of approximately 0.5 Thai Baht in the Fuel Tariff (FT), dropping from 0.8955 Thai Baht to 0.3972 Thai Baht. Thailand's Fuel Tariff is adjusted based on fuel prices, currency exchange rates, and other variables, with adjustments made every four months.
To alleviate the impact of soaring international fuel prices on the public and businesses, the Thai government required the EGAT to bear additional fuel costs from September 2021 to May 2023. This resulted in significant losses for EGAT. With the limited extent of the electricity price hike, it is likely that more time will be needed to address the debt issues faced by EGAT.
On the other hand, private enterprises in Thailand express gratitude for the government's control over the electricity price hike. Although there were initial expectations for it to drop to 4.10 Thai Baht per kWh, the new electricity prices are generally acceptable. Isares Rattanadilok Na Phuket, Vice Chairman of the Federation of Thai Industries (FTI), stated that while the government has successfully reduced the electricity tariff from the expected 4.68 Thai Baht to 4.18 Thai Baht, there are still a series of issues to be addressed to ensure that Thailand's electricity prices remain below 4 Thai Baht per kWh in the long term.