Thailand's newly adopted electricity prices remain high, averaging THB 4.15 per kilowatt-hour. (Photo: iStock)
As the new year begins, Thailand's newly adopted electricity prices remain high, averaging THB 4.15 per kilowatt-hour (about USD 0.12).
Although this marks a slight reduction compared to 2024, the price remains above 4 Baht, and the future trend is still uncertain, especially as the Electricity Generating Authority of Thailand (EGAT) faces unresolved massive debt issues.
Thailand's electricity prices remain high
About 60% of Thailand's electricity generation relies on liquefied natural gas (LNG). Since 2021, the government has required EGAT to provide electricity subsidies to prevent the economic impact of soaring international fuel prices.
However, this has led to significant losses for EGAT, prompting the Energy Regulatory Commission (ERC) to raise electricity prices to THB 4.18 (about USD 0.12) in early 2024, officially breaking the THB 4 barrier, which remained unchanged until the end of the year.
In response to fluctuations in the power and fuel markets, Thailand reviews electricity prices every four months. The ERC stated that the main factors influencing electricity prices include gas prices, as well as the price difference between the market rate and the discounted natural gas sales from EGAT and the national oil and gas conglomerate, PTT Plc.
Although international LNG prices have declined, EGAT’s debt remains high. The ERC continues to emphasize the necessity of raising electricity prices. In December 2024, the ERC conducted an online survey, seeking feedback from businesses and households on three proposals for electricity pricing: maintaining the current rate, increasing it by 26%, or increasing it by 31%.
Thailand's EGAT faces severe losses due to electricity price subsidies. (Photo: EGAT)
High electricity to harm business, foreign investment
Under the proposed plan, a 31% increase would push the electricity price to 5.49 Baht per kWh (about USD 0.16), which would not only help pay off EGAT's debt of THB 85.2 billion(about USD 2.4 billion) but also compensate for the loss of about THB 15 billion (about USD 438 million) from discounted natural gas sales.
Ultimately, the government decided to slightly lower electricity prices for the first quarter of 2025, aiming to alleviate the financial burden on the public before gradually addressing EGAT’s losses.
Thailand’s electricity prices are generally higher than those in other Southeast Asian countries, which not only increases operating costs for domestic businesses but also negatively impacts foreign investment.
The President of the Federation of Thai Industries (FTI), Kriengkrai Thiennukul, has warned that continued price hikes could lead to more small and medium-sized enterprises (SMEs) closing and push foreign investors to relocate to countries like Vietnam.
Source: Bangkok Post(1), (2), The Nation
