The Energy Regulatory Commission (ERC) has authorized a hike in electricity rates from September to December this year, with the price of power reaching a record high of 4.72 baht per kilowatt-hour (unit).
Prime Minister Gen Prayut Chan-o-cha earlier urged the agency to consider postponing the announcement, originally set for August 1.
As Thailand imports more expensive liquefied natural gas (LNG) for power generation and given that 60% of the fuels utilized to produce electricity in the country are gas, the ERC said it must increase rates.
The power tariff, which consists of the base and fuel tariffs, is used to determine the cost of electricity. The base tariff pertains to the cost of power plants and distribution infrastructure, though the fuel tariff is primarily decided by rising fuel costs caused by the ongoing Russia-Ukraine situation and a number of other factors.
According to the ERC, the fuel cost would increase to 0.9343 baht per unit, causing the electricity tariff to rise to 4.72 baht per unit.
Thailand is now required to import more LNG since demand has increased for domestic gas supplies from the Gulf of Thailand, which are less expensive. Spot market’s LNG costs between $25 and $50 per million standard cubic feet per day (MMSCFD), whereas gas from the Gulf of Thailand costs between $6 and $7 per MMSCFD. (NNT)
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