Thailand Aims to Keep Electricity Costs Stable Amid Economic Slump

Picture courtesy of Bangkok Post

Thailand's energy officials assure citizens that electricity bills will not become more expensive later this year. Energy Minister Pirapan Salirathavibhaga announced plans to manage power tariffs, alleviating financial pressure amidst a sluggish economy.

During a social media broadcast, Mr Pirapan outlined the government's efforts to adjust the power tariff, set to change from September to December. The current rate, 3.98 baht per kilowatt-hour, is in effect until the end of August. He assured that the forthcoming rate would be comparable or slightly lower.

A key challenge is the fluctuating prices of liquefied natural gas (LNG), especially after the recent 12-day Israel-Iran war, which briefly disrupted the market. The conflict ended with a ceasefire following US intervention, causing a temporary 10% rise in LNG prices.

Gas remains central to Thailand's power generation, comprising 60% of fuel usage. The country primarily imports LNG from the Middle East, as domestic supplies dwindle. Any escalation in Middle Eastern tensions, such as potential closures of the Strait of Hormuz, could affect LNG transport.

To stabilise prices, Mr Pirapan aims to enhance management of Thailand's two gas pools: Gulf Gas, sourced from the Gulf of Thailand and Myanmar, and Pool Gas, which includes imported LNG. These adjustments seek to grant power producers access to more affordable gas sources.

Additionally, Mr Pirapan is reviewing the signing of new power purchase agreements (PPAs). More PPAs can raise costs due to the 'availability payment' system, which obligates the government to pay for electricity capacity even if not fully utilised. With current power generation capacity at 55,000 megawatts, well above the usual demand of 25,000 to 26,000MW—and a peak of 36,000MW in the hot season—this strategy aims to prevent excess costs.

Critics have highlighted Thailand's electricity surplus, which exceeds 30%, double the reliability standard of 15%. Opposition voices argue for a reassessment of current energy policies to address this imbalance.

By managing these factors, Thailand’s government hopes to maintain steady electricity costs, providing economic relief and stability amidst external pressures.

  Adapted by ASEAN Now from Bangkok Post 2025-07-04