Thai electricity costs a turnoff for investors, FTI warns government

His remarks came just weeks after the country's Energy Regulatory Commission approved a new power tariff of 3.99 baht per kilowatt-hour for power bills for households and businesses from September to December.

However, the commission recently proposed new electricity tariffs for the first quarter of the coming year, which could reach a maximum of 6 baht per unit.

During a press release event on the FTI monthly's Industry Sentiment Index for October, Kriengkrai said it was a waste of time and energy for the country to review the electricity price every four months.

The move not only eroded Thai entrepreneurs' confidence, particularly small and medium-sized enterprises (SMEs), but also discouraged foreign investors from investing in the country, he said.

Electricity prices in Vietnam are currently around 2.70 baht per kilowatt-hour, while prices in Indonesia are around 3.30 baht.

"The issue of electricity bill alone is sufficient for investors to travel to Vietnam and Indonesia. What Thailand needs right now is a stable price infrastructure that can provide electricity at a reasonable price," he said.

He said this would require related parties, including the Electricity Generating Authority of Thailand (EGAT), to reform their electricity pricing structure.

"We are not seeking the lowest price. We prefer that the country's electricity price range between 2.70 and 3.30 cents per kilowatt-hour in order to maintain our competitiveness," he said, questioning how Vietnam and Indonesia could charge such affordable rates but not Thailand.

"We all know what causes Thailand's electricity bills to be higher than the others. The reason is not the cost of energy used to generate electricity. We urgently require structural reform," he said, without further elaboration.

Meanwhile, Kriengkrai warned EGAT and other related parties not to become an impediment to the current government's policy of attracting foreign companies and investors to Thailand.

Prime Minister Srettha Thavisin is currently in San Francisco for the Asia Pacific Economic Cooperation (APEC) Summit and the APEC CEO Summit, where he met with various leading American companies and discussed current and future cooperation.

In the two months since taking office, PM Srettha has travelled to many countries, including China, with the goal of promoting Thailand as a distinct hub for foreign investors and manufacturers.

He once said that his primary role as the prime minister would be to woo investors and promote Thailand's mega-projects, such as the southern "Land Bridge", to advance the country's strategic objectives.

The FTI chairman said the prime minister's efforts would be useless if the country's energy prices are high, causing foreigners to view Thailand as their last option.

Kriengkrai's comments came as the latest Thailand Industry Sentiment Index for October 2023 fell to 88.4 from 90.0 in the previous year. The index has seen a steady decline over the last four months, reaching its lowest level in 16 months since July 2022.

The sentiment index fell in several key areas, including overall purchase orders, sales, production volume, and turnover. The decrease in fuel and energy prices, on the other hand, had a positive impact on production costs.

Still, the index is expected to fall to 94.5 in the next three months, down from 97.3 in September 2023, due to a variety of factors. One of them is the possibility of higher electricity prices and minimum wage, which will increase production costs.

The federation urged the government sector to accelerate the implementation of economic stimulus measures by the end of the year, including the implementation of an e-refund initiative that should go into effect in December 2023 rather than in January 2024, in order to encourage Thais to spend.

Its report also advised the government to expedite the implementation of loan repayment deferment measures for SMEs for a year, while applying the tripartite board's methods in determining the minimum wage, taking the regional economy into account.