The national oil and gas conglomerate PTT Plc has agreed to delay accepting payments of 8-9 billion baht for the gas it sells to the Electricity Generating Authority of Thailand (Egat) to help the government reduce power bills for the rest of this year.
Gas makes up around 60% of the fuel used for power generation in Thailand.
To tame aggressive electricity prices, the Srettha Thavisin cabinet resolved last month to reduce the power tariff to 3.99 baht per kilowatt-hour (unit), from 4.45 baht, but this increases the financial burden on Egat, which needs part of the power tariff to help it settle a huge loss.
The authority has accumulated losses from subsidising electricity bills between September 2021 and May 2023 to ease the impact of higher fuel prices on households and businesses.
Egat’s losses was earlier expected to fall to 135 billion baht by the end of August.
Auttapol Rerkpiboon, chief executive of PTT, said the company would extend the payment period for gas bought by Egat to help the utility better manage its finances.
“We will face more burdens because of an increase in our financial costs, but the subsequent impact is not much,” he said on Tuesday.
Egat said earlier that it could not cope with any further requests for cheaper electricity bills during the final four months of the year as it would affect its ability to invest in necessary power infrastructure.
The authority said the 4.45-baht tariff was acceptable and should not be amended as it would take Egat longer to settle its debts. It was forecast to clear its losses by April 2025 based on a tariff of 4.45 baht.
If the repayment period is extended, it will affect Egat’s cash flow and credit rating, which could lead to higher loan interest rates, said former Egat governor Boonyanit Wongrukmit.