Russia-Ukraine conflict excuse for energy hike

The conflict between Russia and Ukraine continues to be the excuse by utilities suppliers to raise energy prices.

The Energy Regulatory Commission today announced the power tariff would increase to a record high of 4.4 baht per kilowatt-hour (unit) between September and December meaning Thai residents face higher bills.

The ERC says the higher power tariff, which is made up of the base tariff and fuel tariff, is because Thailand needs to import more liquefied natural gas, which is costly but it serves as a key fuel for electricity generation.

The fuel tariff is mainly determined by fuel costs, which are increasing as the Russia-Ukraine conflict continues, while the base tariff refers to the cost of power plants and distribution systems.

The Electricity Generating Authority of Thailand says its hands are tied and only has a limited budget to subsidise power bills. They agreed earlier to spend 80 billion baht, or 0.24 baht per unit, to subsidise the fuel tariff rate between May and August and added that without this financial aid, the power tariff would have soared to 4.4 baht per unit.

ERC secretary-general Khomgrich Tantravanich says the global energy price fluctuations will remain as long as the war and sanctions by the US and its allies against Russia do not end.

Before the war, the liquefied natural gas price at US$10 per metric million standard cubic feet per day. The price later increased to US$20-30 per metric million standard cubic feet per day, compared with the domestic gas price of less than US$10 per metric million standard cubic feet per day in the Gulf of Thailand.

Gas makes up 60% of the fuel used to generate electricity in Thailand.

A decline in gas supplies from domestic sources in Thailand led authorities to import more liquefied natural gas. The proportion of liquefied natural gas in the country’s total gas supply has risen to 40%, up from 20%, while gas from domestic sources fell from 64% to 40%.

SOURCE: Bangkok Post