Electricity bills will not rise despite a hike in oil prices as the government has capped the fuel tariff (Ft) rate, said Energy Minister Supattanapong Punmeechaow.
Mr Supattanapong, also a deputy prime minister, insisted on Tuesday that power bills would be impervious to rising oil prices with the government now freezing the Ft rate until the end of year to help households.
However, authorities will be closely monitoring the global oil situation, he added. The recent spike in oil prices was caused by the onset of early winter in many parts of the world, he noted.
In early July, the Energy Regulatory Commission (ERC) agreed to maintain the Ft rate at minus 0.1532 baht per kilowatt-hour (unit) despite a rise in fuel costs and lower electricity demand due to travel restrictions.
This Ft rate -- to be used for the rest of this year -- puts the power tariff rate, which is used to calculate electricity prices, at 3.61 baht per unit.
Capping the Ft rate helps people pay for their living costs, but it also means state power agencies will have to bear a cost of 4.13 billion baht, said ERC secretary-general Khomgrich Tantravanich.
The Ft rate, which is adjusted every four months, varies with respect to fuel costs and the foreign exchange rate. The ERC has used an Ft rate of minus 0.1532 baht since January, down from minus 0.1243 baht last year.
Meanwhile, the Energy Policy Administration Committee (Epac) has approved a guideline for stabilising the prices of diesel to cushion the effects on consumers. Mr Supattanapong said the Oil Fuel Fund's contribution from diesel B7 has been cut from 1 baht to 0.1 baht per litre, resulting in the price of diesel B7 going down by one baht per litre.
Moreover, Epac also approved the reduction of a biodiesel (B100) mix of diesel B7 (7%) and diesel B10 (10%) to B6 (6%), effective from next Monday until the end of the month. This will also help to lower the price of diesel, which is to be temporarily capped at 30 baht per litre, in the longer term, Mr Supattanapong said.