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Thailand: Cheaper power bills on the cards as fuel tariff to be cut
Homeowners may see cheaper electricity bills in May as the National Energy Policy Council (NEPC) has approved spending 13 billion baht from gas sales contracts in Myanmar to reduce the fuel tariff (Ft).
National oil and gas conglomerate PTT Plc is the sole buyer of natural gas from operators at the Yadana and Yetagun offshore gas fields in the Gulf of Martaban under take-or-pay contracts, which commit it to paying for a fixed amount of gas, though their usage may be lower than the amount stated in the contracts.
PTT already paid the money, though it did not use all the gas in certain years, including 1997-98 when Thailand suffered an economic meltdown. This allowed the company to save money for gas purchases in the following years as the paid money became an advance payment.
The money it saved over the years has accumulated, and up to 13 billion baht of the amount can be allocated to adjust the Ft rate, according to the NEPC.
Kulit Sombatsiri, permanent secretary for energy, said the money is enough to reduce the Ft for power bills from May to August this year.
The Ft, which is used to calculate electricity bills, is determined by many factors, including fuel prices.
Power bills are set to increase by 4.6% from January to April this year to an average of 3.78 baht per kilowatt-hour (unit) as Thailand needs to import costly liquefied natural gas (LNG) for electricity generation, according to the Energy Regulatory Commission.
A state measure to cap electricity bills, helping to relieve people’s living costs, has been implemented over the past two years.
This measure is due to end as global LNG prices increase.
With the 13 billion baht from the gas contracts, the monthly Ft decreases to 0.014 baht per unit from 0.071 baht per unit, said Mr Kulit.
Officials adjust the Ft every four months, basing their calculation on foreign exchange rates, power consumption and fuel costs.
He said the government’s living cost relief programmes — a cap on diesel prices of 30 baht a litre and on cooking gas at 318 baht per standard cylinder — will end after March this year.
An energy official who requested anonymity said policymakers plan to introduce a new ceiling price for diesel to help with living costs because the maximum of 30 baht has been in place for more than 15 years.
Source: https://www.bangkokpost.com/business/2244811/cheaper-power-bills-on-the-cards-as-fuel-tariff-to-be-cut