ISTANBUL

Thailand's electricity prices could rise by up to 18% for the May-August billing period as mounting liquefied natural gas (LNG) prices linked to the Middle East conflict push power generation costs, according to a Bangkok Post report published on Wednesday.

The Energy Regulatory Commission (ERC) is preparing to propose electricity tariffs ranging from roughly 3.95 to 4.59 Thai baht ($0.12 to $0.13) per kilowatt-hour, up from about $0.11 currently in effect through the end of April.

The upper end of that range would represent an 18% increase, highlighting the growing cost pressure on households and businesses in the import-dependent economy.

Thailand relies on LNG, along with gas from the Gulf of Thailand and Myanmar, for around 60% of its electricity generation, leaving it highly exposed to global price volatility.

Pressure on prices has intensified after two QatarEnergy LNG cargoes, each carrying 60,000 tons, were unable to pass through the Strait of Hormuz.

Spot LNG prices have since climbed to about $25 per million British thermal units, nearly double last year's average, sharply increasing fuel costs for power producers.

An energy official said the government is bracing for a surge in electricity bills, while large-scale subsidies appear unlikely due to lingering financial strain from measures introduced during the Russia-Ukraine war in 2022.

During that period, the Electricity Generating Authority of Thailand (EGAT) and PTT Plc spent heavily to shield consumers from rising LNG costs. EGAT still carries losses of over $1 billion, while PTT faces around $360 million in outstanding costs.

The official said one option to limit increases could involve suspending debt repayments to EGAT and PTT and reallocating unused funds from state electricity agencies.

Caretaker Energy Minister Auttapol Rerkpiboon has said he aims to keep tariffs unchanged at current levels, but authorities are awaiting policy direction from Prime Minister Anutin Charnvirakul, whose government is expected to present its policy statement in early April.

Coal-fired plants can generate electricity at below 6 US cents per kWh, offering a cheaper alternative, but Thailand’s limited lignite reserves constrain broader use despite moves to restart units at Egat’s Mae Moh plant.