State-run Electricity Generating Authority of Thailand (Egat) is worried about its heavy financial burden after spending billions of baht to subsidise electricity expenses for people since last year.
Last year Egat was ordered by the Energy Regulatory Commission (ERC) to cap the fuel tariff, or Ft, on power bills from September 2021 to April this year, which cost Egat around 60 billion baht.
Ft is mainly determined by fuel costs, which are increasing as the Russia-Ukraine war continues.
It also agreed to spend 80 billion baht, or 0.24 baht per unit, to subsidise the Ft rate between May and August this year.
Despite a loan worth 25 billion baht the government will grant to Egat, this may not be sufficient as power generation costs will remain at very high levels, said Boonyanit Wongrukmit, governor of Egat.
The ERC expects locals to face pricier electricity bills, with the power tariff increasing to a record high of 4.4 baht per kilowatt-hour (unit) between September and December.
The higher power tariff, which is made up of the base tariff and Ft, 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.
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 the authorities to import more LNG.
The proportion of LNG of total gas supply has risen to 40%, up from 20%, while gas from domestic sources fell from 64% to 40%. The rest is gas imported from Myanmar.
Energy authorities earlier asked national oil and gas conglomerate PTT Plc to help Egat relieve its financial burdens.
PTT decided to postpone Egat's gas purchase payment worth 13 billion baht which was due in May for another four months.
