Thailand’s energy minister initiates major revamp of energy pricing structure

Pirapan Salirathavibhaga, the Deputy Prime Minister and Energy Minister, pledged to initiate a significant revamp of Thailand’s energy pricing structure, beginning with the removal of refined oil import restrictions. His commitment to this overhaul aims to alleviate the current strain of escalating energy costs on the populace.

“I will overhaul the entire system to help ease the current burden of higher energy prices, which in a way will free up people’s lives from the seemingly uncontrollable energy prices. We will be rebuilding a new, fairer energy system for the country, which will ensure energy security and sustainability.”

The result of these adjustments, he declared, should cause the cost of fuel and similar energy forms to descend to more manageable levels.

Nevertheless, he expressed his readiness to confront the expected strong opposition from oil refineries and similar enterprises, admitting that this endeavour would not be a walk in the park. According to him, these entities have been reaping considerable profits from elevated energy prices for an extended period, reports Bangkok Post.

“Those who have long been benefiting substantially from high energy prices and will now have to lose their usual benefits have been sponsoring certain politicians for protection. But I’m not afraid of them since I intend to overhaul the entire system.”

He pointed out that stringent regulations currently prevent the importation of refined oil for sale within the country, an issue that requires rectification. The liberalisation of oil imports is a central strategy intended to exert more control over domestic oil prices.

Energy policies

This approach was among the energy policies announced in Parliament by the Pheu Thai Party-led coalition upon his appointment as energy minister last year.

He remarked that work on this front has already started, although it has yet to gain media attention. Pirapan disclosed that he had already successfully advocated for the transfer of natural gas harvested and processed in the Gulf of Thailand, a move aimed at boosting profits for the gas sector supplying power plants and other energy producers.

The Cabinet, on December 19 of the previous year, approved a Ministry of Energy proposal to maintain the diesel price below 30 baht (US$0.87) per litre and limit the electricity tariff at 3.99 baht (US$0.12) per kilowatt-hour for households consuming no more than 300 units monthly.

As a new year’s gift, the government consented to keep the diesel price below 30 baht (US$0.87) per litre and liquefied petroleum gas and cooking gas at 423 baht (US$12.33) per 15 kilogramme for three months.

Concerning electricity, the government sanctioned the proposal to cap the electricity tariff at 3.99 baht (US$0.12) per unit for those consuming less than 300 units from January to April, a move expected to benefit around 17 million households. As a result, the electricity price during this period will not surpass 4.20 baht (US$0.12) per unit, with the vulnerable group, consuming less than 300 units monthly, paying the existing rate of 3.99 baht (US$0.12) per unit.

Concerning diesel and petrol, the retail price of diesel will remain under 30 baht (US$0.87) per litre for another three months, while the reduction in the price of petrol will continue until the end of January.

Energy prices

According to Pirapan, these efforts to reduce energy prices would not have been possible without the full backing of Prime Minister Srettha Thavisin, who serves as the chairman of the National Energy Policy Committee (NEPC). He pointed out that the high energy prices are a significant factor in the rising cost of living, a major issue that the government is striving to mitigate while simultaneously stimulating the economy through various policies.

In the coming months, he anticipates more strategies to be implemented to further reduce energy prices for specific groups. Among these groups, he mentioned, are farmers who might be provided with low-cost oil, currently being offered to fishermen.

In related news, Thailand’s energy ministry is revising fuel regulations for consumer protection.