Regulator maintains fuel tariff rate to assist with living costs

Regulator maintains fuel tariff rate to assist with living costs

The Energy Regulatory Commission (ERC) has agreed to maintain the fuel tariff (Ft) rate at minus 0.1532 baht per kilowatt-hour (unit) despite a rise in fuel costs and lower electricity demand due to travel restrictions.

This Ft rate — to be used for the rest of this year — means the power tariff rate, which is used to calculate electricity prices, is 3.61 baht per unit.

Capping the Ft rate helps people pay for their living costs, but it also means state power agencies have to bear a cost of 4.13 billion baht in total, said ERC secretary-general Khomgrich Tantravanich.

The Ft rate, which is adjusted every four months, varies with respect to fuel costs and the foreign exchange rate.

ERC has used an Ft rate of minus 0.1532 baht since January, a drop from minus 0.1243 baht last year.

The commission estimates the global oil price will rise by 10% to US$66 per barrel from $60 per barrel in the first Ft period (January to April this year), while the baht is forecast to level around 31 to the dollar.

The pool price of natural gas, which accounts for 54% of power generation in Thailand, is expected to rise by 7% to 249.6 baht per million British thermal units (BTU) from 240 baht per million BTU in the first Ft period.

The price is usually adjusted 6-7 months after changes in oil prices.

The price of imported coal is estimated to rise by 6% to 2,386 baht per tonne from 2,302 baht per tonne in the first Ft period, while the price of domestic lignite is estimated to remain unchanged at 693 baht per tonne.

Coal-fired power plants make up 17% of power generation capacity in Thailand, with electricity from major power plants both in the country and in Laos.

Mr Khomgrich said the ERC estimates demand for on-grid electricity in the next Ft period (September to December) to decline by 5% from the second Ft period (May to August) to 64.5 billion units as work from home measures continue for employees as part of the state’s efforts to control Covid-19.

The government also provided people with power bill discounts to help those struggling to pay bills during the pandemic.

This relief measure incurred a cost of 26.6 billion baht during the first Covid-19 outbreak early last year, then another 7 billion during the second outbreak, which erupted in mid-December last year.

The power bill assistance has a price tag of 4.13 billion baht during the ongoing third wave this year.