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EGAT Proposes Annual Fuel Tariff Recalculation to Stabilize Prices

The Electricity Generating Authority of Thailand (EGAT) is set to propose a significant change in the country’s energy sector. The proposal entails shifting the recalibration of the fuel tariff (FT) on electricity from a quarterly basis to an annual adjustment. This move aims to address the persistent fluctuations in electricity prices, particularly impacting industries and households.

Thepparat Theppitak, the newly appointed governor of EGAT, openly acknowledged the challenges posed by the current system. He conceded that the frequent adjustments in the FT have led to considerable volatility in electricity prices, significantly affecting consumers and complicating production cost forecasts for industries.

Advocating for an annual recalculation of the FT, Theppitak asserted that such a measure would bring long-term benefits to all stakeholders involved. He emphasized that EGAT would be better equipped to manage its energy production costs effectively under this new framework. Additionally, he reassured stakeholders by affirming that the current electricity price of 4.18 baht per unit remains reasonable.

EGAT finds itself grappling with a substantial debt burden amounting to 99 billion baht. This debt has primarily accumulated due to EGAT’s efforts to subsidize the FT, thereby maintaining the electricity price at 4.18 baht per unit. Theppitak outlined EGAT’s anticipation of receiving repayment of this debt in seven installments from the government. Such repayments are expected to inject much-needed liquidity into EGAT, subsequently bolstering its cash flow and enhancing its credit rating.

The proposed transition in the recalibration of the fuel tariff reflects EGAT’s strategic endeavor to address the challenges associated with fluctuating electricity prices while ensuring stability and sustainability in Thailand’s energy sector.

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