Key business leaders have jointly called on the government to put a cap on the fuel tariff (Ft), a main component of electricity prices, for one year as another "New Year gift" to help Thailand avoid unpleasant impacts as the economy recovers.
The Ft, which is increasing as a result of higher fuel prices, notably imported liquefied natural gas, is a key contributor to the power tariff, which is used to calculate power bills.
The Energy Regulatory Commission decided last week to raise the power tariff for businesses by 20.5% to 5.69 baht per kilowatt-hour (unit), up from 4.72 baht. The new rate is scheduled to be enforced between January and April next year.
"If the government doesn't fix the Ft rate, Thai inflation will increase by 0.5% to 3.5%, up from the expected 3% next year," said Sanan Angubolkul, chairman of the Thai Chamber of Commerce.
The chamber, the Joint Standing Committee on Commerce, Industry and Banking, key business associations and Siam Cement Group (SCG) all called on the government on Friday to reconsider the new power tariff.
Roongrote Rangsiyopash, president and chief executive of SCG, Thailand's largest cement maker and industrial conglomerate, said if authorities continue with the power tariff hike, energy costs will increase by 20%.
"Many companies cannot curb their operating costs. They may need to push the burden onto customers or some may shut down," he said.
Higher energy costs may force SCG to increase product prices by around 20%, but the company will try to delay a price increase as it does not want to see people struggle in dealing with higher living costs, said Mr Roongrote.
SCG earlier decided to raise product prices by 20%, following the global oil price surge, driven by the Russia-Ukraine war and the contagion.
He said the company does not want to see Thailand encounter more economic woes after the country was beset by high inflation, expensive crude oil prices and the pandemic.
Yol Phokasub, president of the Thai Retailers Association, said the retail sector pays 3-4 billion baht a year for energy. If the government hikes the Ft, that outlay will increase to 8 billion baht a year, he said.
Small and medium-sized enterprises, which make up 80% of retail businesses, can hardly afford to pay higher power bills, said Mr Yol.
"We ask the government to offer a New Year gift by fixing the Ft rate for one year," he said.
Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association, is worried a higher Ft will affect smaller hotels that are struggling with the higher minimum wage and have yet to fully recover from Covid.
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said higher power bills will discourage foreign investors from expanding their business to Thailand.