Thailand
Thailand: Business sector warns prices will rise if cost of electricity goes up
The Federation of Thai Industries has warned that product prices will rise if the government approves a planned electricity price hike from next month.
FTI chairman Kriangkrai Thiennukul said on Tuesday that increasing the cost of electricity, currently 4.72 baht per unit, would force businesses to gradually increase prices of their products by 5-12%.
It would also affect the country’s competitiveness, including foreign direct investment (FDI), which was relocating amid fierce competition due to the global economic slowdown.
The government must review the country’s energy structure in order to maintain long-term energy costs in an appropriate direction and in line with the changing global situation, especially a move toward clean energy to take care of all groups of energy users.
Vietnam, for example, it did not push the electricity cost burden onto industries. Instead, Vietnam focused on encouraging households to save electricity. That was in contrast to Thailand, Mr Kriangkrai said.
“The government should accelerate the promotion of power generated from solar energy at all levels for immediate use, and the rest to be sold into the system, by making it more convenient. It should also promote biofuel such as ethanol. Use of gasohol E20 will help to reduce oil imports,‘’ the FTI chairman said.
FTI vice chairman Isares Rattanadilok na Phuket, said the federation had earlier proposed to the Joint Public Private Committee, and submitted in a letter to the Ministry of Energy’s Electricity Regulatory Commission (ERC), that a hold be put on the next round of electricity price increases, planned for the January-April period next year, and the focus placed on tackling the root cause.
“We have to admit that the electricity cost crisis comes from management of natural gas in the Gulf of Thailand during the transition to the concession at the Erawan gas field, which had been delayed, causing the importation of liquefied natural gas that was sold at very high prices to generate electricity instead. There was also a lack of a timely response plan in advance,’’ Mr Isares said.
ERC secretary-general Khomgrich Tantravanich has previously said the cost of electricity would rise about 14% to a minimum 5.37 baht per unit for the January to April period next year, on rising fuel costs.
The ERC had three options – and the increment to 5.37 baht would cost consumers the least. The two other choices were 5.70 baht and 6.03 baht per kilowatt-hour (unit), Mr Khomgrich said on Nov 14.
Last month, the National Energy Policy Council chaired by the prime minister asked PTT Group to contribute 6 billion baht from its gas separation revenue to help freeze electricity charges for small users from January to April next year, according to Energy Minister Supattanapong Punmeechaow.
The NEPC resolved on Nov 25 to ask PTT to spend 1.5 billion baht per month from January to April next year to cut the price of gas it supplies to the Electricity Generating Authority of Thailand. This would allow Egat to freeze its electricity charge for people who use no more than 500 units per month, the minister said.
Source: https://www.bangkokpost.com/business/2459575/business-sector-warns-prices-will-rise-if-cost-of-electricity-goes-up