Gas, oil prices to hike power rates soon
Watcharapong Thongrung
The Nation
BANGKOK: -- Consumers will soon have to pay 30 satang per unit more for electricity after the Energy Regulatory Commission (ERC) responds to increases in fuel tariff (Ft) costs.
The Electricity Generating Authority of Thailand had pointed out that the Ft cost from May to August could increase to more than Bt20 billion.
Egat governor Sutat Patamasiriwat said yesterday that the increased Ft cost was due to rising prices of natural gas and crude oil. In particular, the price of natural gas, which is the main component of the Ft, will increase from Bt260 to Bt280 per million British thermal units from January to April. The cost will likely increase further to Bt300 from May to August and yet again to Bt320 from September to December. These price estimates are based on the assumption that the price will not be lower than Bt260 per million Btu.
The cost of electricity is based mainly on natural-gas and oil prices. The latter is being driven up by several global factors. The growing economies of China and India have increased demand, as has Japan's recent policy of reducing utilisation of nuclear power. On the supply side, the tense situation in the Persian Gulf, which could lead to closure of the Strait of Hormuz, could add US$35 or more to the present price of about $120 per barrel.
Sutat said Egat had to absorb an Ft cost of Bt8 billion in the January-to-April period after the ERC ordered a freeze on electricity fees. It is predicted that Egat will have to shoulder an even higher cost of Bt20 billion from May to August.
"We have to borrow to absorb the rising Ft cost," said Sutat, adding that all concerned agencies should educate the public on rising energy costs, which have gone beyond even the ability of the government's Oil Fund to handle.
As natural gas accounts for as much as 70 per cent of the Kingdom's electricity generation, an energy-security problem could arise in the future if trading partners stop exporting gas.
Sutat also commented on the open bid to purchase electricity from major independent power producers.
He said a balance should be maintained between Egat and IPP production. Such a strategy would ensure the country's energy security as well as creating competition in the market.
"If Egat has too little capacity, it will affect the country's ability to manage electricity during a crisis," Sutat said.
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