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Thailand Confident in Coping with Oil and LNG Price Volatility
Thailand's Ministry of Energy has affirmed its ability to mitigate the impact of volatile global oil and LNG prices on public life through sufficient oil reserves and various measures. While rising LNG prices could affect electricity rates, the ministry plans to manage this by increasing domestic gas supply and utilizing renewable energy.
The Ministry of Energy confirmed on July 31 that amid global volatility in oil and liquefied natural gas (LNG) prices, Thailand possesses sufficient oil reserves for 101 days and is implementing several measures to mitigate the impact on public life. Veerapat Kiattifuengfu, deputy permanent secretary and spokesperson for the Energy Ministry, stated that the global oil market faces significant volatility due to the unpredictable US-Iran conflict, directly impacting energy supply. The ministry is closely monitoring the situation and assessed that July's oil trading prices were approximately US$7-8 per barrel higher than June's, an increase of about 10-12%. While retail oil prices in neighboring countries have risen in line with global market prices, Thailand's Energy Ministry continues to utilize the Oil Fuel Fund mechanism and price controls at refineries, as per the Energy Policy Administration Committee's directive, to maintain prices and prevent negative impacts on the public's cost of living. Meanwhile, imported LNG, a key fuel for electricity generation, has increased significantly. Before the conflict, it was approximately US$11 per million BTU, but has risen to around US$18-20 per million BTU, an increase of nearly 60%. This is due to the market's assessment of increased supply risks, as nearly 20% of global LNG supply relies on transportation through the Strait of Hormuz. Prices are expected to rise further in the near future due to increased LNG usage during the upcoming winter. "Regarding imported LNG, which impacts electricity rates, management strategies include increasing gas supply from the Gulf of Thailand, purchasing electricity from short-term renewable energy sources and Laos, plus increasing production at the Mae Moh (coal-fired) power plant," he explained. "In order to reduce LNG imports as much as possible, without affecting electricity rates, the Energy Ministry is prepared to implement all necessary measures to reduce the cost of living for the people as much as possible," he added. Source: Thai Newsroom
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Thai Newsroom