Just a few weeks ago, the Energy Regulatory Commission of this country green-lit a new power tariff of 3.99 baht per kilowatt-hour applicable to all residences and establishments, effective from September to December. However, the tables have turned once again, as the commission has now instigated proposed tariffs for the ensuing first quarter that might climb up to 6 baht per unit. Talk about causing a buzz!
Addressing the FTI monthly’s Industry Sentiment Index conference for October, Kriengkrai couldn’t help but brand the constant fluctuating electricity prices every four months as both tiresome and a drain on the country’s resources. This frequent readjustment strategy has not only caused erosion in confidence among local Thai entrepreneurs, especially the small-to-medium enterprises, but also deterred foreign investors contemplating to invest in the promising Thai market, he warned.
In fact, let’s juxtapose these rates with our neighbours – in Vietnam, the going rate is just about 2.70 baht per kilowatt-hour, while Indonesia charges around 3.30 baht. Kriengkrai couldn’t help but employ a witty metaphor, declaring that the electricity bill alone is enticing enough to lure investors to depart to Vietnam or Indonesia.
“Thailand’s energy landscape should prioritize stability and reasonability over these constant changes. We need a solid infrastructure that can deliver this,” he added. He called for a reform of the electricity pricing structure by relevant parties, namely, the Electricity Generating Authority of Thailand (EGAT).
In terms of pricing, Kriengkrai wasn’t asking for rock-bottom rates but a perfect balance between 2.70 and 3.30 cents per kilowatt-hour for Thailand to keep pace with its competitors. He openly wondered how other countries like Vietnam and Indonesia managed to offer such tantalizing rates while Thailand couldn’t match up. Joning the dots, he declared that it wasn’t the energy production costs bloating Thailand’s electricity tariffs. Instead, a rather urgent structural reform was needed but didn’t delve into the details.
Kriengkrai also had cautionary advice for the EGAT and other associated parties – avoid becoming roadblocks in the current government’s endeavor to reel in foreign companies and investors to Thailand.
With the Asia Pacific Economic Cooperation (APEC) and APEC CEO Summit in San Francisco on his agenda, PM Srettha Thavisin is looking forward to sitting down with top-tier American firms discussing current and future alliances. Ever since he came to power, Srettha has been wooing investors, determined to turn Thailand into an investment hub. His list of attractions? ‘Land Bridge’ being one of the exciting mega-projects that are set to shape Thailand’s strategic path.
However, Kriengkrai mentioned that the prime minister’s hard work might prove fruitless if the disproportionately high energy costs continued to sour foreign investors’ perception of Thailand.
Interestingly, these discussions follow a slump in the Thailand Industry Sentiment Index for October 2023, which plummeted to 88.4 from 90.0 last year. The survey highlights deteriorating conditions across various areas, including total orders, sales figures, production volume, and turnover. However, dropping fuel and energy prices did manage to provide a silver lining on the cloud of rising production costs.
The federation strongly urged the public sector to fast-track economic stimulus measures before the year’s end. Recommendations include advancing the e-refund initiative from January 2024 to December 2023 and pushing for SME loan repayments deferment for a year, along with considering the regional economy in minimum wage determinations.