Fuel tariff hike to set record high

The FT rate will rise during this period to 93.43 satang per kWh, up 68.66 satang per kilowatt-hour. This will take the overall power bill to its new record high, up from B4 at present, reports the Bangkok Post.

The source said the FT hike does not require a public hearing as it is the lowest of three proposed rates explored.

The three options have already gone through an earlier public hearing round which was concluded on Monday.

With the increase, the Electricity Generating Authority of Thailand (Egat) would continue to subsidise the electricity fee to help people. The Egat’s debt resulting from the subsidy was expected to rise to B109.67 billion by the end of next month, the source said.

The hike in the power tariff, which is made up of an FT and a base tariff, results mainly from a need to import more liquefied natural gas (LNG), which is costly but currently serves as a key fuel for electricity generation.

The base tariff refers to the cost of power plants and distribution systems, while the FT is mainly determined by fuel costs, which are increasing as the Russia-Ukraine war continues.

The FT is usually adjusted every four months. The latest adjustment was made for the May-August period, with the Ft rising by B0.47 per unit, resulting in a power tariff of B4 per unit.

The Egat agreed earlier to spend B80bn, or B0.24 per unit, to subsidise the FT rate between May and August.

Before the war, the LNG price in the spot market stood at US$10 per metric million standard cubic feet per day (MMSCFD).

The price later increased to $20-30 per MMSCFD, compared with a domestic gas price of less than $10 per MMSCFD in the Gulf of Thailand.

Gas makes up 60% of the fuel used to generate electricity in Thailand.

A decline in gas supplies from domestic sources in the Gulf of Thailand led authorities to import more LNG.

The proportion of LNG in the country’s total gas supply has risen to 40%, up from 20%, while gas from domestic sources fell from 64% to 40%.

The remaining gas is imported from Myanmar.