Consumers are advised to brace for increases in the prices of electricity and fuel next year, even though the government will try its best to minimise the rises.

After the Energy Regulatory Commission (ERC) proposed an increase in the price of electricity, from 3.99 baht to 4.68 baht/unit for January-April, the Ministry of Energy is to hold consultations with the ERC on how to trim the fuel tariff (FT), averaging 89.55 satang/unit, to limit the proposed increase, which is considered by the government to be too large.

Energy Permanent Secretary Prasert Sinsukprasert said that the ministry envisions a reduction in dependence on natural gas in electricity generation and an increase in the use of renewable or clean energy sources. Renewable energy is, however, still expensive, so this could actually increase electricity prices.

He said the ministry may seek approval from the Budget Bureau for additional funding from the Central Fund, to subsidise electricity prices for low income-earners in case the price increase is inevitable, adding that the new price for next year should not exceed 4.20 baht/unit.

In addition to the increase in the price of electricity, he said that prices of fuels, such as diesel, benzine and gasohol, are expected to rise next year, because the subsidies, used to keep the prices from rising through a cut in excise tax, are due to expire at the end of December.

Due to the excise tax cuts, the pump price of diesel is currently being kept at 29.94 baht/litre. The excise cuts on other fuels are 2.50 baht/litre for gasohol 91, one baht/litre on gasohol 95 and 85 satang/litre for gasohol E20 and E85.

The Energy Ministry is having a hard time maintaining the subsidy on diesel and LPG, because the Oil Fund, which is used to subsidise the prices, is running about 77 billion baht in red, 31.8 billion baht for diesel and 45.8 billion baht for household LPG.

Prasert said, however, that it is fortunate that the global crude oil price at the end of this year is about US$90 per barrel and diesel is around US$110, making it possible for the Oil Fund to continue to subsidising the diesel price at one baht/litre, but that subsidy may have to go up to 3-4 baht/litre if excise taxes are not cut as well.