Heat exceeds 50 degrees Celsius, Thailand reduces electricity prices

April is a hot month in Thailand. Over the past several weeks, the Southeast Asian country has been experiencing increasingly sweltering temperatures, high humidity, wind and other factors. Temperatures have soared above 50 degrees Celsius in many parts of the country, according to Bloomberg.

The sweltering temperatures include the tourist island of Phuket, which has hit the country’s smokeless economy even harder. Air quality in the northern city of Chiang Mai, a popular tourist destination, has not improved since forest fires and stubble burning earlier this month, with air particles now measuring nearly 10 times the World Health Organization’s recommended limit. Chiang Mai has been ranked the world’s most polluted city.

Record heat has sent electricity bills soaring, household incomes tumbling and pushed energy prices to the top of the election agenda. Demand for electricity hit an all-time high on April 21 as homes and businesses cranked up air conditioning, according to Thailand’s national energy regulator.

Heat exceeds 50 degrees Celsius, Thailand reduces electricity prices - 1 — Heat surpasses 50 degrees Celsius, Thailand reduces electricity prices. (Illustration: Bloomberg)

“We are in the peak summer season when electricity demand is usually high. We expect demand to remain high from this month until May,” said Prasertsak Cherngchawano, an official at Thailand’s state-run electricity company.

In response, retail electricity prices in Thailand will be cut from May 1. The Electricity Generating Authority of Thailand has agreed to reduce the retail electricity tariff to 4.70 baht per unit for the May-August period, down from an earlier proposal to keep it at 4.77 baht. But Thailand’s household electricity prices have soared in the past year due to higher fuel import costs. In addition, industrial and commercial electricity users have had to pay higher prices to help the Electricity Generating Authority of Thailand recoup some of the losses incurred by selling electricity below cost.

In addition, the Thai cabinet has also approved a plan to subsidize electricity prices for about 23 million households over the next four months, at a cost of 11.1 billion baht ($322.5 million), according to government spokesman Anucha Burapachaisri.

Temperatures are rising across parts of Asia, with power grids stretching from India to Bangladesh driving up demand for fossil fuels. While the heatwave has eased in recent days, the risk of another heatwave in a matter of weeks could pose a risk to individuals and businesses.

As consumers complain about high electricity bills following last year’s energy crisis, political parties in Thailand have increasingly talked up ways to cut costs. The main opposition Pheu Thai Party, which leads in opinion polls, has said it will immediately cut electricity prices if it wins the May 14 election. Helping Thais cope with rising living costs is a common refrain among Thai political parties as they compete for the election, especially after Thailand’s inflation hit a 14-year high in 2022.

Phuong Anh (Source: Bloomberg)

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