The cabinet has approved the capping of power bills at 4.18 baht per unit until the end of the year and set the diesel price ceiling at 33 baht per litre until Oct 31.
According to Energy Minister Pirapan Salirathavibhaga, the cabinet on Tuesday approved the measures proposed by the Energy Ministry to manage energy prices, maintaining the electricity rate at 4.18 baht per kilowatt-hour (unit) for September-December 2024.
Additionally, there are measures in place to support vulnerable groups who use no more than 300 units of electricity per month.
Regarding diesel prices, the cabinet acknowledged the retail price ceiling of 33 baht per litre, the price which the Oil Fuel Fund can sustain until Oct 31.
After that, the Energy Ministry will monitor the situation and measures to continuously manage oil prices, according to Mr Pirapan.
"We [the Energy Ministry] will discuss with the Finance Ministry, which may use an excise tax reduction on diesel as a supplementary measure or other measures to help stabilise oil prices further," he said.
According to Mr Pirapan, regarding the amendment of the law to set a cap on oil prices, he is expediting this legislation. He acknowledged that it would not be ready by the end of October, but it was necessary to propose it to parliament as soon as possible according to legal procedures, saying this was essential because Thailand has been without such a law for 50 years, even though oil prices significantly affect the public.
Mr Pirapan said the legal amendments would also need to consider the authority of the Oil Fuel Fund, which previously had the power to set oil price caps and determine the proportions for contributions to the Oil Fuel Fund.
"We have been without a law to manage oil prices for over 50 years, even though it significantly affects the public. When oil prices rise, we complain, but the fact is that the ex-refinery price of oil in the country is only around 20 baht per litre," he said. "However, the price of one litre of oil includes components such as ethanol and biodiesel, as well as various taxes, such as the excise tax on oil, which is 5.99 baht per litre. Therefore, our oil price reaches 38-40 baht per litre. If we had a law, we could manage oil prices for the public."
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), said the government's decision to maintain the power tariff at 4.18 baht per kilowatt-hour relieves the FTI's concerns over increasing operating costs, which threaten to lead to business shutdowns.
Mr Kriengkrai said earlier that the federation could not agree if energy authorities were to push ahead with their plan to increase the power tariff by 11-44%.
He said many businesses, especially small and medium-sized enterprises (SMEs), would not be able to shoulder additional costs, including energy prices, as they are struggling to get through the current economic downturn.
Higher operating costs are among the factors causing a number of factories to close down.
During the first five months of this year, up to 600 factories were shuttered, compared with 358 factories during the corresponding period last year, according to the FTI.
The federation also found the value of these factories was generally lower than last year on average, meaning that most of the factories that closed were small.
"The smaller size shows that they are SMEs. We wonder whether they will survive if the electricity price increases," said Mr Kriengkrai.