Thailand: FTI calls for industrial power subsidies
The Federation of Thai Industries (FTI) is calling on the government to extend its electricity subsidy measures for the public to also cover manufacturers, which are struggling to deal with an increasing financial burden amid high energy prices.
Expensive electricity bills are threatening to put more pressure on production costs, which may eventually mean some entrepreneurs are unable to afford to cover their expenses, said Kriengkrai Thiennukul, chairman of the FTI.
He made the comment after the Energy Policy Administration Committee (Epac) yesterday decided to allocate 8 billion baht for discounts on the fuel tariff (Ft) between September and December this year.
Ft, which is determined by fuel prices, is a key element in the power tariff, which is used to calculate electricity bills.
The Energy Regulatory Commission said earlier that electricity bills in the last four months of 2022 would increase, with the power tariff soaring to a record high of 4.72 baht per kilowatt-hour (unit).
“We agree with the Epac’s move. It’s a great measure to help people cope with the higher cost of living,” said Mr Kriengkrai, adding that the industrial sector also needed similar financial aid.
Manufacturers are not only encountering higher energy costs, but they also have to deal with rising prices of some raw materials due to the impact of the ongoing Russia-Ukraine war.
Mr Kriengkrai said higher fossil fuel prices had prompted many factories to use more renewable energy, including biomass, biogas and solar energy, to save costs. They had also bought new machinery which would lead to more energy saving.
However, manufacturers say they still need help from the government to get through the energy price crisis.
The FTI had earlier asked the government to consider capping the Ft rate for a year, following the example of Vietnam, which is helping businesses maintain their competitiveness through an Ft price subsidy programme.
“The Thai Ft rate is currently 30% higher than in Vietnam. This could make us lose our competitiveness in the industrial sector due to higher manufacturing costs,” said Mr Kriengrai.
Lower electricity prices in Vietnam also attract more foreign investments, he said.