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WEDNESDAY, December 07, 2022
Energy commission cites 4 reasons for increasing fuel tariff

Energy commission cites 4 reasons for increasing fuel tariff

THURSDAY, August 18, 2022

The Energy Regulatory Commission (ERC) spelt out four reasons for its decision to raise the fuel tariff from September, which in turn would cause a rise in household electricity fees.

On Monday, the ERC announced it would increase the tariff from 0.6866 baht per unit to 0.9343 baht, which would see household power fees rise to 4.72 baht per unit.

It said the four reasons for the increase are:

1. The decreasing amount of gas in the country.

Thailand has had to import spot LNG to replace insufficient gas, but the Russia-Ukraine war has sent the price of this LNG soaring amid volatile delivery. Therefore, using LNG or fuel will significantly increase the price of producing energy.

2. Gas production in Myanmar has decreased.

The amount produced in that country will keep decreasing from the end of 2022 to the beginning of 2023.

3. LNG manufacturers have slowed investment.

The Covid-19 crisis hit energy demand, but with many countries now recovering, LNG demand has outstripped production, with the current situation affecting the price and negotiations for the gas.

4. The Russia-Ukraine war.

The conflict has forced Russia to reduce or halt natural gas sales to Europe, so the demand for LNG has increased significantly in Europe, indirectly affecting the LNG price in Asia.