The ongoing war in the Middle East is a new litmus test for the energy policies of governments around the world, including the new administration in Bangkok. This time, the government and our energy policymakers hope -- and indeed pray -- that this Middle East conflict will be brief.
Right now, the country's oil reserves are sufficient only until the end of April. Although the Thai government can purchase from other sellers in the US or Africa, prices will never be low. Consumers must also prepare for higher electricity bills, as our country relies heavily on imported natural gas to produce 50% of the electricity we consume. These natural gas supplies are shipped via the Strait of Hormuz, currently controlled by the Iranian government.
Indeed, this is not the first global oil crisis Thailand has faced. Our governments have been dealing with Middle East oil shocks since the 1970s. Those administrations provide useful examples of how to address problems at a fundamental level.
During the Arab oil embargo in the 1970s, the Thai government restructured the country's energy policy by building its own refineries and launching the Petroleum Authority of Thailand (PAT) -- later becoming PTT in 1978 -- to secure national energy independence.
During the Iran-Iraq war in the 1980s, former prime minister Gen Prem Tinsulanonda launched the first serious and successful energy-saving campaign, convincing people to reduce car use, lower air-conditioning temperatures, use energy-efficient lighting, and reduce industrial consumption. These messages were embedded in school curricula and frequently broadcast to the public.
So far, the Anutin government is repeating the same old solution used during the energy crisis caused by the Russia-Ukraine war. The response mainly focuses on providing subsidies through the Oil Fund or the budget to freeze energy prices. That money, however, could be better spent on improving economic competitiveness or other constructive development projects.
Meanwhile, consumers simply wait for government subsidies and continue with life as usual.
Traffic congestion remains heavy, even on routes served by the BTS Skytrain or subway. Electricity consumption stays high, especially during the hot season. The country remains highly dependent on oil and gas, as before.
The current Middle East turmoil offers the government an opportunity to restructure energy policy and reduce our vulnerability to geopolitically sensitive commodities such as oil and gas.
It is time for the Electricity Generating Authority of Thailand (Egat) to renegotiate contracts with power plants to reduce fuel tariff (FT) fees that consumers must pay, even when plants do not generate electricity. The FT fee helps foster the energy industry and maintain the electricity supply, but it appears cold-hearted and greedy during difficult times.
Without changes to the FT in power contracts, the government will continue to provide subsidies rather than launch meaningful energy policy reform.
Regulations should also encourage households to sell electricity generated by rooftop solar panels to the national grid, rather than reserving this opportunity primarily for industrial rooftops.
In every crisis, there is an opportunity. It is time for the Anutin government and its technocrats to show they can do more than simply provide subsidies.
