Thailand
Thailand: Fuel tariff freeze demanded as oil prices imperil economy
Executives at the Federation of Thai Industries (FTI) want the government to freeze the fuel tariff (Ft) on power bills and maintain retail gas prices to ease the impact of soaring global oil prices on economic activities and the cost of living.
Some 80.7% of FTI executives surveyed are in favour of the authorities holding steady the Ft rate for four months, from May to August this year.
A cap on the Ft is viewed as one of the most effective ways of dealing with higher energy prices, according to the FTI, which interviewed 150 executives in 45 industries across Thailand.
Encouraging businesses to save electricity was mentioned as a solution by 59.3%, followed by 53.3% supporting the maintenance of retail gas prices, covering compressed natural gas for transport operators and liquefied petroleum gas, or cooking gas, for households. A total of 52.7% agreed with specific help for small and medium-sized enterprises and low-income earners.
“The findings reflect that energy prices are a key factor that can affect economic recovery and drive operating costs to very high levels,” said Wirat Uanarumit, vice-chairman of the FTI.
A total of 87.3% of respondents agreed that expensive goods prices caused by higher energy costs was the most serious issue requiring swift attention from the government. In second place was higher cost of living (82%), followed by rising inflation (51.3%) and economic activities slowing down (41.3%).
In a previous survey released early last month, most respondents said manufacturers could fix their product prices without adjustment for another 1-2 months before seeing them rise and remain high for at least three months.
Earlier in January, energy authorities said people may pay cheaper electricity bills in May as the National Energy Policy Council approved spending 13 billion baht from gas sales contracts in Myanmar to reduce the Ft rate.
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 commits it to paying for a fixed amount of gas, though their usage may be lower than the amount stated in the contracts.
PTT has already paid the money, though it did not use all the gas in certain years, such as 1997-98 when Thailand suffered an economic meltdown. This allowed the company to save money for gas purchases in the following years, with the cash serving as an advance payment. The money PTT saved over the years has accumulated and up to 13 billion baht can be allocated to adjust the Ft rate.
Kulit Sombatsiri, permanent energy secretary, said the money is sufficient to cut the Ft for power bills from May to August this year.
Source: https://www.bangkokpost.com/business/2273667/fuel-tariff-freeze-demanded-as-oil-prices-imperil-economy