Thailand Cabinet caps electricity at 4.18 baht, diesel at 33 baht

The Thai Cabinet approved measures to cap electricity prices at 4.18 baht per unit until the end of the year and diesel prices at 33 baht per litre until October 31. A new energy structure law is set to be introduced today, July 23.

Following a Cabinet meeting, Deputy Prime Minister and Energy Minister Pirapan Salirathavibhaga announced that the government agreed to implement energy price reduction measures. The new electricity rate is set at 4.18 baht per unit, with continued support for vulnerable groups using no more than 300 units per month, who will be charged 3.99 baht per unit until the end of the year.

Pirapan stated that the diesel price ceiling will remain 33 baht per litre until the end of October this year, utilising the Oil Fund mechanism.

“The new energy structure law, which has been in place for over 40-50 years, will not conflict with anyone’s interests. If the new law is not ready in time, alternative measures will be implemented to address the issue temporarily.”

The decision underscores the government’s commitment to reducing the financial burden on consumers amid rising energy costs. By capping these prices, the administration aims to provide immediate relief while working on long-term structural changes in the energy sector.

The new law is anticipated to bring significant changes to the energy sector, addressing long-standing issues and modernising regulations to better suit current needs and future challenges. This move is seen as part of the government’s broader strategy to ensure energy security, affordability, and sustainability.

Economic impacts

The approval of these measures comes at a critical time, as households and businesses continue to grapple with the economic impacts of fluctuating energy prices. The cap on electricity and diesel prices is expected to provide some stability and predictability, which is crucial for both consumers and the economy.

In the interim, the use of the Oil Fund to maintain the diesel price cap illustrates the government’s proactive approach to managing energy costs. The fund will act as a buffer to absorb price fluctuations and prevent sudden spikes that could adversely affect the public.

The announcement of the new energy structure law set for next year indicates a forward-thinking approach, aiming to align the country’s energy policies with global standards and practices. This new legislation is expected to introduce reforms that will enhance efficiency, promote renewable energy sources, and ensure a more robust and resilient energy infrastructure.

Stakeholders in the energy sector are watching closely, as the forthcoming changes could impact various aspects of the industry, from pricing and regulation to investment and development. The government’s assurance that the new law will not conflict with existing interests is likely to be a key factor in its successful implementation.

Overall, these measures reflect a balanced approach to immediate relief and long-term reform, aiming to stabilise the energy market and protect consumers while paving the way for a more sustainable and efficient energy future, reported Khaosod.