Cabinet Approves Electricity Rate Reduction in Thailand
Proposal to lower power bills for May to August period receives cabinet approval, pending Energy Regulatory Commission finalization.
On April 1, 2025, the Thai Cabinet approved a proposal to reduce electricity prices from 4.15 baht per kilowatt hour to 3.99 baht for the billing period spanning May 1 to August 31, 2025. The decision aims to alleviate the financial burden on households and businesses amid rising living costs.
Prime Minister Paetongtarn Shinawatra emphasized the government's intent to lower electricity rates as a response to public demand, particularly from lower-income households.
This reduction represents a decrease of approximately 4% in the electricity bill.
The Cabinet has stipulated that without state subsidies, the power charges must not exceed the newly proposed rate during the upcoming four-month period.
The final determination of the new rate lies with the Energy Regulatory Commission (ERC), which is expected to announce its decision later this month.
Prior to this cabinet discussion, the ERC indicated potential rates for the May-August period could range from 4.15 to 5.16 baht per unit, influenced by factors including the allocation required for reimbursing the Electricity Generating Authority of Thailand (EGAT) and gas shippers.
The Pheu Thai Party, which leads the coalition government, has advocated for a long-desired reduction in electricity prices to maintain them below the psychological threshold of 4 baht per unit.
However, regulators have expressed concerns regarding the limits to their ability to decrease rates due to financial obligations set by existing long-term power-purchase agreements made by EGAT.
In January, the ERC communicated its willingness to lower the electricity charge by 0.17 baht per unit, contingent upon the government's agreement to cut spending on renewable energy investment initiatives.
Such programs currently receive funding through a portion of the power tariff.
Electricity tariffs in Thailand are evaluated every four months, reflecting changes in variable costs such as fuel, exchange rates, and other economic indicators.
The ERC has cautioned that a lower power tariff could extend the time required for EGAT to resolve its subsidy-related debts.
Furthermore, former Prime Minister Thaksin Shinawatra, father of current Prime Minister Paetongtarn Shinawatra, stated that there are aspirations to lower the electricity tariff to around 2.70 baht per unit, though he did not provide specific strategies for achieving this target.
Current surplus electricity in Thailand is estimated at approximately 30%, which exceeds the capacity considered advisable in most countries.
Prime Minister Paetongtarn Shinawatra emphasized the government's intent to lower electricity rates as a response to public demand, particularly from lower-income households.
This reduction represents a decrease of approximately 4% in the electricity bill.
The Cabinet has stipulated that without state subsidies, the power charges must not exceed the newly proposed rate during the upcoming four-month period.
The final determination of the new rate lies with the Energy Regulatory Commission (ERC), which is expected to announce its decision later this month.
Prior to this cabinet discussion, the ERC indicated potential rates for the May-August period could range from 4.15 to 5.16 baht per unit, influenced by factors including the allocation required for reimbursing the Electricity Generating Authority of Thailand (EGAT) and gas shippers.
The Pheu Thai Party, which leads the coalition government, has advocated for a long-desired reduction in electricity prices to maintain them below the psychological threshold of 4 baht per unit.
However, regulators have expressed concerns regarding the limits to their ability to decrease rates due to financial obligations set by existing long-term power-purchase agreements made by EGAT.
In January, the ERC communicated its willingness to lower the electricity charge by 0.17 baht per unit, contingent upon the government's agreement to cut spending on renewable energy investment initiatives.
Such programs currently receive funding through a portion of the power tariff.
Electricity tariffs in Thailand are evaluated every four months, reflecting changes in variable costs such as fuel, exchange rates, and other economic indicators.
The ERC has cautioned that a lower power tariff could extend the time required for EGAT to resolve its subsidy-related debts.
Furthermore, former Prime Minister Thaksin Shinawatra, father of current Prime Minister Paetongtarn Shinawatra, stated that there are aspirations to lower the electricity tariff to around 2.70 baht per unit, though he did not provide specific strategies for achieving this target.
Current surplus electricity in Thailand is estimated at approximately 30%, which exceeds the capacity considered advisable in most countries.
