The conflict between Russia and Ukraine is being utilized to inflate energy costs

Global energy price swings will persist, according to ERC Secretary-General Khomgrich Tantravanich, as long as the US and its allies’ war and sanctions against Russia continue. Thailand’s increased power tariff, which is made up of the base and fuel tariffs, is due to the need to import more liquefied natural gas, which is costly but necessary for electricity generation, according to the ERC. They had already promised to spend 80 billion baht (0.24 baht per unit) to subsidize the fuel tariff rate between May and August, alleging that without the financial support, power prices would have climbed to 4.4 baht per unit. The base price pertains to the cost of power plants and distribution networks, whereas the fuel tariff is primarily driven by rising fuel costs as the Russia-Ukraine conflict continues. The price increased to US$20-30 per metric million standard cubic feet per day, compared to less than US$10 per metric million standard cubic feet per day in the Gulf of Thailand.

Liquefied natural gas now accounts for 40% of the country’s total gas supply, up from 20% previously, while gas from domestic sources has decreased from 64% to 40%. The Energy Regulatory Commission announced that the power rate would climb to a new high of 4.4 baht per kilowatt-hour (unit) between September and December, resulting in higher bills for Thai citizens. Utility firms are continuing to use the conflict between Russia and Ukraine as an excuse to raise energy prices.

In Thailand, gas accounts for 60% of the fuel utilized to create energy. Due to a decline in gas supplies from indigenous sources, Thailand’s government had to buy more liquefied natural gas. Before the war, the price of liquefied natural gas was $10 per metric million standard cubic feet per day. Due to a paucity of money, Thailand’s Electricity Generating Authority argues it has no choice but to subsidize power bills.