The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) has proposed two ways by which the government could cut the FT (fuel tariff) on electricity charges for the September-December period, claiming that global energy prices have been steadily falling, while domestic liquefied natural gas (LNG) supply has increased.
In a letter addressed to Prime Minister Prayut Chan-o-cha, Isares Rattanadilok Na Phuket, vice chairman of the Federation of Thai Industries, said that representatives of the JSCCIB met on July 5th to discuss ways to cut the FT for the third quarter of this year, to ease the burden on consumers and businesses.
The FT cut is justified, he said, because LNG production from the Erawan field in the Gulf of Thailand has increased from about 200 million cubic feet/day to 400 million cubic feet in July, and is expected to increase to 600 million cubic feet/dayin December, which will help reduce LNG imports.
LNG imports have now fallen to 41% (from 47%) of the supply needed to generate electricity. The LNG spot price has fallen by about 30%, from USD20 per million BTU to USD14 for the May-August period, while global energy prices are also steadily falling, reflecting a contraction of the global economy.
The debt repayment burden of Electricity Generating Authority of Thailand, Thailand’s biggest state-owned electricity producer, for the first and second instalments has eased due to a reduction in production costs.
The first option proposed by the JSCCIB is for the government to extend the debt repayment by EGAT from five installments to six, to allow the FT to be cut by 10 satang per unit of electricity.
The second option is for the government to limit the number of LNG importers to just one, to prevent false demand created by the other independent shippers, and to procure LNG in advance at prices ranging from USD14-16 per million BTU.
