The Finance Ministry has been given the green light to guarantee a loan worth 85 billion baht which the Electricity Generating Authority of Thailand (Egat) will use to cushion the effect of a higher fuel tariff (Ft) driving up household electricity bills.
The cabinet on Tuesday approved a proposal for the ministry to guarantee the loan which Egat plans to take out.
The Ft is determined by fuel prices, and is a key element in the power tariff, which is used to calculate electricity bills. The 85-billion-baht loan is intended for Egat to maintain a proper level of liquidity while it manages the Ft and works to minimise the impact of high global energy prices on households, Energy Minister Supattanapong Punmeechaow said.
Egat governor Boonyanit Wongrukmit previously revealed that Egat had spent close to 100 billion baht subsidising the Ft since last September.
And in managing to stay afloat, Egat previously sought 25 billion in loans to help maintain its liquidity while continuing to subsidise the Ft because fuel prices in the global market were rising, he said.
Meanwhile, a related proposal by the ministry to subsidise an Ft discount offered to low-income households is expected to be approved by the cabinet next Tuesday, said the energy minister.
According to an Energy Ministry source, there are two vulnerable groups entitled to receive an Ft discount reflected in their electricity bills, namely those using 300 units of household electricity per month or less and those using between 301 and 500 units per month.
The first group will receive a discount of 68.66 satang on the increased Ft per unit of electricity used from this month until December, while the second group will get a discount of between 15% and 75% on the increased Ft for the same period, said the source.
The Energy Regulatory Commission in August approved a hike in electricity bills between this month and December, with the power tariff soaring to a record high of 4.72 baht per unit from 4 baht per unit.
The two groups of household electricity users account for about 89% of all household electricity users nationwide, according to the source.
The energy bill subsidy programme will be implemented along with an alternative energy promotion scheme in which the government will offer an incentive for households and businesses to use solar cells, said the source.
The Ft subsidy package will be accompanied by a proposed extension of the financial aid for cooking gas buyers, which is scheduled to end later this month, said the source.
LPG discounts are also set to increase from 45 baht to 100 baht per 15-kilogramme standard cylinder per month for those with a state welfare card from this month until December.