Global oil prices are expected to fall below US$70 per barrel this week, following the tariff policy announced by US President Donald Trump which has already triggered a new round of the trade war and threatens to affect the international economy, says Thai Oil Plc, Thailand's largest oil refinery by volume.
Changes in oil prices should lead to a drop in liquefied natural gas (LNG) prices, relieving concerns over expensive electricity bills in Thailand, which are partly determined by the price of imported LNG, according to an official at the Energy Ministry.
Gas accounts for 60% of fuels used for power generation in the country.
A fall in global oil prices is possible as Trump's new tariff policy may slow the global economy, said experts from Thai Oil.
Trump earlier said he had decided to delay his plan to put a levy of 25% on imports from Canada and Mexico after the two countries promised to better deal with drug trafficking and illegal immigration, but he may change his mind again as he views the ongoing actions of Canada and Mexico as being insufficient, according to media reports.
Washington imposed an additional 10% tariff on Chinese products on Feb 4, drawing countermeasures from Beijing, which include a 15% tariff on imports of US coal and LNG products.
The trade war between the US and China is expected to reduce fuel demand, putting pressure on global crude prices, according to oil experts.
If oil prices fall, Thailand will pay less for importing LNG from the spot market, with prices likely to be lower than $14 per million British thermal units, said the energy official who requested anonymity.
If LNG prices drop, the power tariff, which is used to calculate electricity bills, could be reduced.
Energy policymakers are working on plans to reduce the power tariff, which currently stands at 4.11 baht per kilowatt-hour. The rate is applicable between January and April this year.