Bangkok: Thailand's economic challenges amid the Middle East conflict have prompted a critical evaluation of energy costs as a potential solution. The ongoing conflict involving Iran, the United States, and Israel has entered its fourth month, impacting global shipping and energy sectors. Following the US Congress's resolution to limit presidential war powers and withdraw troops from Iran, the economic repercussions are felt globally, particularly in the critical Strait of Hormuz, which sees 20% of the world's energy transit, leading to increased shipping costs and heightened insurance premiums.

According to Thai News Agency, Mr. Kiat has highlighted the irregularities in Thailand's energy sector as a significant concern. Despite global fluctuations in oil prices, Thailand's "refinery margin" has seen an abnormal spike from 1.50-2.00 baht per liter to 17 baht per liter at times, suggesting excessive profit margins and insufficient regulatory oversight. The setting of retail fuel prices by regulators, rather than allowing them to be dictated by actual costs, further distorts Thailand's energy pricing structure on an international scale.

In the realm of electricity costs, Mr. Kiat identified two primary issues causing inflated prices for Thai consumers. First, Thailand's power generation capacity far exceeds its peak usage, resulting in high "availability payment" costs that burden the public. Secondly, although Thailand's natural gas reserves are inexpensive, processing costs at power plants align with global market prices, unfairly elevating costs for consumers.

As a former Chairman of the Thai Trade Representative, Mr. Kiat underscored the necessity of dynamic trade negotiations and market expansion. He cited successful past initiatives in South America and the US, advocating for Thailand's potential as a global food reserve through a strengthened agricultural cooperative system.

Mr. Kiat urged the Thai government to focus on reducing the cost of living by reforming the energy sector instead of accruing debt through financial distributions. He emphasized that strategic spending on impactful projects could alleviate economic pressures more effectively than temporary consumption stimuli. As Thailand prepares to join the OECD, Mr. Kiat stressed the need for sustainable policy shifts away from traditional giveaways and discounts.