Thailand's Gas Gamble: How Policy Missteps and Private Gains Drive Up Power Bills
In a nation where more than two-thirds of electricity is generated by gas-fired plants, Thailand's deepening reliance on expensive liquefied natural gas (LNG) imports is not just an energy strategy—it's a growing burden on its people. As global LNG prices spike and domestic gas output dwindles, questions are mounting over whether energy policy mismanagement and elite profiteering have come at the expense of the average Thai household.
At the center of this complex web lies Gulf Energy Development Public Company Ltd., a powerful conglomerate helmed by Thailand's richest man, Sarath Ratanavadi. Together with the state-owned PTT Group, Gulf has secured long-term rights to import, store, and distribute LNG under lucrative government contracts. And while energy prices for consumers rise, so too do the profits of these well-connected corporate giants.
The Cost of Policy Paralysis
The roots of the crisis trace back to delays and dysfunction in the management of Thailand's domestic gas fields. The Erawan and Bongkot concessions in the Gulf of Thailand—once key pillars of the country's energy independence—saw production plummet following administrative upheavals. Chevron, which had operated Erawan since 1981, was ousted in 2021 in favor of a state-backed bidder, PTTEP. The handover was anything but smooth. By 2022, output from Erawan had dropped by over 50%.
Despite promises from successive energy ministers to fast-track exploration and development, a combination of bureaucratic gridlock and deliberate policy choices has led Thailand to import nearly a third of its gas as LNG, compared to under 5% in 2011. These LNG imports are often priced at two to seven times more than domestically produced gas. In 2022, LNG hit a jaw-dropping $38.66 per million BTU, while Thai-sourced gas was only $5.51.
The Institute for Energy Economics and Financial Analysis (IEEFA) reports that LNG imports surged 34% in 2023 alone. The financial toll on Thailand's state utility, EGAT, has been staggering—losses of 150 billion baht ($4.3 billion) between late 2021 and the end of 2022.
A Tale of Two Winners: Gulf and PTT
Gulf Development, once a challenger to PTT's monopoly, now appears to be its most strategic partner. The two firms jointly operate the Gulf MTP LNG Terminal, one of the country's main LNG import facilities. The terminal's capacity is set to double from 5 to 10.8 million tons annually.
Gulf was granted its import license in 2020, becoming only the second private player after EGAT. Since then, the firm has expanded its influence across the LNG supply chain—from procurement to regasification to pipeline distribution.
Critics argue that the system has been gamed to benefit a handful of actors. Two senior officials within the Energy Regulatory Commission (ERC), which oversees procurement policy, previously held advisory or executive roles at Gulf and PTT. The appearance of conflict of interest has eroded public trust in regulatory oversight.
"This is a classic case of regulatory capture," said an IEEFA analyst who requested anonymity. "You have regulators with corporate ties making decisions that steer the country toward imported gas, which just happens to benefit their former—or future—employers."
The Public Pays the Price
The fallout is increasingly visible in Thai households and businesses. Electricity prices have remained elevated despite a fall in global LNG prices in 2024. EGAT, which purchases over 85% of Gulf's power output, absorbs the higher input costs, eventually passing them down to consumers.
Small businesses, already recovering from the pandemic, have seen utility bills cut into margins. Rural provinces have protested rolling blackouts and unaffordable tariffs. Meanwhile, Gulf's profits have soared, bolstered by long-term contracts and a guaranteed buyer in EGAT.
The government's response has been muted. While officials acknowledge rising costs, they continue to cite energy "security" and global volatility as justification for their reliance on LNG.
Yet, a growing chorus of energy economists and civil society groups argue that the crisis is self-inflicted. "Thailand had the resources," said Dr. Nakornthap, a respected energy expert. "What it lacked was the political will and administrative competence to develop them."
What Lies Ahead
With elections on the horizon and household discontent simmering, energy policy is emerging as a political flashpoint. Some opposition leaders are calling for a full audit of LNG contracts and regulatory appointments. Others propose reforms that would prioritize domestic exploration and overhaul procurement transparency.
As the Thai people pay for these missteps at the meter, the broader lesson may echo beyond Bangkok: in energy policy, inaction and insider influence can be just as costly as imported gas.
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International Business Times
5 hours ago
- International Business Times
Thailand's Gas Gamble: How Policy Missteps and Private Gains Drive Up Power Bills
In a nation where more than two-thirds of electricity is generated by gas-fired plants, Thailand's deepening reliance on expensive liquefied natural gas (LNG) imports is not just an energy strategy—it's a growing burden on its people. As global LNG prices spike and domestic gas output dwindles, questions are mounting over whether energy policy mismanagement and elite profiteering have come at the expense of the average Thai household. At the center of this complex web lies Gulf Energy Development Public Company Ltd., a powerful conglomerate helmed by Thailand's richest man, Sarath Ratanavadi. Together with the state-owned PTT Group, Gulf has secured long-term rights to import, store, and distribute LNG under lucrative government contracts. And while energy prices for consumers rise, so too do the profits of these well-connected corporate giants. The Cost of Policy Paralysis The roots of the crisis trace back to delays and dysfunction in the management of Thailand's domestic gas fields. The Erawan and Bongkot concessions in the Gulf of Thailand—once key pillars of the country's energy independence—saw production plummet following administrative upheavals. Chevron, which had operated Erawan since 1981, was ousted in 2021 in favor of a state-backed bidder, PTTEP. The handover was anything but smooth. By 2022, output from Erawan had dropped by over 50%. Despite promises from successive energy ministers to fast-track exploration and development, a combination of bureaucratic gridlock and deliberate policy choices has led Thailand to import nearly a third of its gas as LNG, compared to under 5% in 2011. These LNG imports are often priced at two to seven times more than domestically produced gas. In 2022, LNG hit a jaw-dropping $38.66 per million BTU, while Thai-sourced gas was only $5.51. The Institute for Energy Economics and Financial Analysis (IEEFA) reports that LNG imports surged 34% in 2023 alone. The financial toll on Thailand's state utility, EGAT, has been staggering—losses of 150 billion baht ($4.3 billion) between late 2021 and the end of 2022. A Tale of Two Winners: Gulf and PTT Gulf Development, once a challenger to PTT's monopoly, now appears to be its most strategic partner. The two firms jointly operate the Gulf MTP LNG Terminal, one of the country's main LNG import facilities. The terminal's capacity is set to double from 5 to 10.8 million tons annually. Gulf was granted its import license in 2020, becoming only the second private player after EGAT. Since then, the firm has expanded its influence across the LNG supply chain—from procurement to regasification to pipeline distribution. Critics argue that the system has been gamed to benefit a handful of actors. Two senior officials within the Energy Regulatory Commission (ERC), which oversees procurement policy, previously held advisory or executive roles at Gulf and PTT. The appearance of conflict of interest has eroded public trust in regulatory oversight. "This is a classic case of regulatory capture," said an IEEFA analyst who requested anonymity. "You have regulators with corporate ties making decisions that steer the country toward imported gas, which just happens to benefit their former—or future—employers." The Public Pays the Price The fallout is increasingly visible in Thai households and businesses. Electricity prices have remained elevated despite a fall in global LNG prices in 2024. EGAT, which purchases over 85% of Gulf's power output, absorbs the higher input costs, eventually passing them down to consumers. Small businesses, already recovering from the pandemic, have seen utility bills cut into margins. Rural provinces have protested rolling blackouts and unaffordable tariffs. Meanwhile, Gulf's profits have soared, bolstered by long-term contracts and a guaranteed buyer in EGAT. The government's response has been muted. While officials acknowledge rising costs, they continue to cite energy "security" and global volatility as justification for their reliance on LNG. Yet, a growing chorus of energy economists and civil society groups argue that the crisis is self-inflicted. "Thailand had the resources," said Dr. Nakornthap, a respected energy expert. "What it lacked was the political will and administrative competence to develop them." What Lies Ahead With elections on the horizon and household discontent simmering, energy policy is emerging as a political flashpoint. Some opposition leaders are calling for a full audit of LNG contracts and regulatory appointments. Others propose reforms that would prioritize domestic exploration and overhaul procurement transparency. As the Thai people pay for these missteps at the meter, the broader lesson may echo beyond Bangkok: in energy policy, inaction and insider influence can be just as costly as imported gas.
Straits Times
9 hours ago
- Straits Times
Inside the leaked phone call threatening to bring down Thailand's government
Thai PM Paetongtarn Shinawatra, accompanied by Lieutenant-General Boonsin Padklang, whom she had disparaged in the leaked phone call, visiting an army base near the Cambodian border on June 20. PHOTO: REUTERS - It was an undignified breach of diplomatic protocol and personal confidence between world leaders that arguably has no clear precedent – at least in terms of its power to embarrass, and potentially unseat, a sitting government. The damaging leak of her 17-minute phone conversation with Cambodian senate president Hun Sen has left Thai Prime Minister Paetongtarn Shinawatra clinging to a crumbling ruling coalition, her position written off as untenable by most political analysts. Mr Hun Sen , Cambodia's former strongman leader, in recording the conversation and then disseminating the audio clip, likely had domestic political calculations at the front of his mind, analysts say. These include bolstering the position of his son and current prime minister Hun Manet and, amid rising nationalist sentiment, demonstrating that his country remained uncowed in its renewed military spat along the border it shares with its larger neighbour. But in tipping Ms Paetongtarn's Pheu Thai Party-led government into turmoil, unwittingly or otherwise, Mr Hun Sen's actions are likely to invite a more assertive posture from Thailand following the brief border skirmish on May 28 that saw one Cambodian soldier killed. 'The Pheu Thai government, if it does remain in power, is now boxed in when it comes to Cambodia: it can no longer afford to be seen as weak and deferential to Hun Sen and Hun Manet,' said Mr Ken Lohatepanont, a political analyst and doctoral candidate at the University of Michigan. 'I would expect that the military will now have greater latitude to pursue its desired course of action in the future,' he added. Dr Thitinan Pongsudhirak, a political science professor at Chulalongkorn University, said it was now tantamount to the Thai army being given 'a blank cheque' to manage the border dispute how it saw fit, after Ms Paetongtarn, the daughter of former prime minister Thaksin Shinawatra, had previously been seen by critics as being too soft on the issue. 'Thailand is now at risk of escalating the border dispute because of Paetongtarn's mistake,' he said. On June 20, Ms Paetongtarn travelled to an army base near the Cambodian border in a show of support for Thai troops, accompanied by the region's army commander, Lt-Gen Boonsin Padklang, whom she had disparaged in the leaked phone call with Mr Hun Sen. Her trip came as conservative pro-monarchist groups, including supporters of the 'yellow-shirt' movement that protested against Mr Thaksin when he was in office, said they planned to intensify demonstrations demanding Ms Paetongtarn's resignation. It was also made as the conservative United Thai Nation Party was reported by local media on June 20 as being poised to quit the government – which would tip the ruling coalition into a parliamentary minority – unless Ms Paetongtarn stepped down, after just 10 months as prime minister. The 38-year-old political novice assumed power in August 2024 at the head of an uneasy post-election coalition between her Pheu Thai Party and a clutch of pro-military parties which were part of the conservative establishment whose distrust and rivalry with Mr Thaksin's political movement had dominated Thailand's political landscape for much of the past two decades. It remains unclear how an initial excerpt of the leaked June 15 call first surfaced online and then was swiftly picked up by Cambodian and Thai media outlets. Mr Hun Sen denied leaking the audio, but was quick to confirm its veracity. He said in a social media post that the call with Ms Paetongtarn had been recorded 'to avoid any misunderstandings' and that he had shared the audio clip with about 80 Cambodian officials. He subsequently posted the full recording to his official Facebook page on June 18. In the call, Ms Paetongtarn is heard pleading with the former Cambodian leader to help resolve border tensions between the two South-east Asian nations that she said were proving damaging to her government. Addressing Mr Hun Sen as 'uncle', Ms Paetongtarn appeared to blame the Thai army for inflaming tensions and referred to them as 'the opposite side'. She urged Mr Hun Sen to ignore comments from Lt-Gen Boonsin, who she said merely wanted to 'appear cool'. Ms Paetongtarn initially said her words were merely part of a 'negotiation tactic' but on June 19 issued a public apology for her remarks and slammed Mr Hun Sen for recording the call without her knowledge and leaking it. 'In diplomatic protocol terms, leaking a phone call like this is obviously a breach of the privacy that you would expect between leaders,' said Ms Susannah Patton, the director of the South-east Asia Programme at the Lowy Institute, an Australian think tank. 'That being said, Paetongtarn was definitely naive not to foresee that it could be revealed in some way,' she noted. 'The deferential form of address to Hun Sen, the appearance of selling out her own army commander, and repeated calls on Cambodia to de-escalate which made her look weak – it's very damaging,' Ms Patton added. Mr Hun Sen's actions are likely to be especially galling to the Shinawatra clan, given the long and close association between the two political families. Mr Hun Sen was the first foreign leader to visit Mr Thaksin in February 2024, following the latter's return to Bangkok after a 15-year self-imposed exile. 'Hun Sen is answerable to Cambodian public pressure. He needed to take the Thai army to task, and in doing so, he has spun this gambit with Paetongtarn,' said Dr Thitinan. 'He's willing to burn that relationship (with the Shinawatras) to get what he wants for domestic consumption,' he added. As the army commander in charge of Thailand's border response with Cambodia, Lt-Gen Boonsin has cultivated a high profile with his bellicose remarks towards opposing troops. In an interview with local news outlet The Standard published prior to his meeting with Ms Paetongtarn on June 20, he urged the Prime Minister to be 'mindful' and to support the national interest in dealing with the border dispute. 'Any reconciliation is likely to only occur at the surface level,' Mr Lohatepanont said of the pair's meeting. 'The call's contents revealed very clearly that Pheu Thai does not trust the military, but having it revealed so publicly ironically ensures that they will now have to be deferential to the military,' he said. Philip Wen is regional correspondent at The Straits Times, covering South-east Asia from his base in Bangkok. Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
12 hours ago
- Business Times
So you've taken over your family restaurant
RESTAURANTS are delicate things — especially mom-and-pop operations. Among the smallest of small businesses, the most successful attract customers with a combination of low costs, intense deliciousness, do-it-yourself charm and pure gumption. The hawker stands of Southeast Asia are famous examples of this. Diners forgive rough service, put up with long queues and forego white tablecloths — if not tables — for a chance to enjoy a secret sauce, that special spark, the elemental spirit passed down generation to generation. Scaling up these tiny treasures might maximise profits, but the risk is losing the magic. A line of cooks organised along Auguste Escoffier's kitchen brigade system may help churn out dishes and feed a lot more people efficiently, but certain recipes require exacting experience and a discriminating je ne sais quoi. They may not survive the transition. Customers who are used to lower prices will also grouse at the increased costs that come with more staff and expanded real estate. A purist or two will complain that you've sold out. I've been worrying about this because friends of mine are in the process of scaling up a mom-and-pop operation that had a legendary cult following here in London. People used to take 45-minute train rides from the middle of the city east to less-than-posh Leytonstone on a chance that a table — even if you had to share it — might open up at the Thai restaurant Singburi. That's because 'mom' — who took bookings only over the phone — said there was no availability unless diners didn't show up. 'Pop' started the restaurant in 1999, but Singburi's reputation got going after Sirichai Kularbwong joined him in the kitchen toward the end of the last decade. Over that period, his parents toyed with the idea of retirement and finally decided to do it at the end of 2024. By then, the hole-in-the-wall underdog had become the 73rd best restaurant in the UK. Will Singburi 2.0 — in a brightly modern, much bigger space in trendy Shoreditch — be able to replicate its former charms? Some favorites from its old chalkboard menu aren't on offer, and that will disappoint some followers. I'm a friend and fan of Kularbwong and his partners, and so, while I've tasted (and thoroughly enjoyed) a preview, I have to await popular acclaim — or the opposite — along with them after the restaurant officially opens this week. I'm rooting for them and sharing in the anxiety, almost like family. I take some comfort from the recent remaking of another family-run Thai restaurant. In Copenhagen last month, at Noma chef Rene Redzepi's MAD symposium on the future of food, Justin Pichetrungsi — who'd been working for Walt Disney Co as an animator — gave a speech describing how he had to change careers in 2019 when his chef father suffered a stroke. He took over Anajak, a four-decade-old traditional Thai restaurant. He proceeded to innovate (think Thai Taco Tuesdays), turning it into one of the most sought-after reservations in Los Angeles. He instituted his changes, including a huge list of natural wines, while in close consultation with his father and the kinfolk who'd always helped run the place. Pichetrungsi won the 2023 James Beard Award for best chef in California. His mother, who remains in charge of making Anajak's mango sticky rice, wore the medal when he returned to LA with the prize, and proudly got fruit stains on it. Sometimes family may just be what a restaurant in jeopardy needs. In February 2003 — despondent over an unexpected demotion in the unforgiving world of French haute cuisine — Bernard Loiseau, the celebrated chef of Cote d'Or, a three-Michelin star restaurant in Burgundy, walked up to the upstairs bedroom where he usually took a nap after lunch service. He then shot himself in the head. There was heated debate in the media over what part of the system was to blame for the tragedy. Then the world moved on. But not Loiseau's family. The chef was the relentless genius at the centre of not just Cote d'Or, but also the eponymous company he built around it. Indeed, Bernard Loiseau SA was traded on the Paris stock exchange. How could such a personality-driven enterprise exist without him? His culinary reputation was also the only real thing his grieving family could claim ownership of. So his widow Dominique decided to press on. With most of her late husband's staff, she persevered, keeping Cote d'Or going. Eventually, two of their three children — daughters Bérangère and Blanche — would become part of the operations. Bérangère took over the front of the house and the management of the finances; and Blanche would join the kitchen. It hasn't been easy. In a poignant speech at MAD, Bérangère talked about channeling her father through his writings and documents to figure out how to move forward with the restaurant and the company. Nevertheless, in the 22 years since his death, Cote d'Or hasn't only expanded to include the small hotel Relais Bernard Loiseau and several other properties, it's also kept its Michelin stars. In 2003, Dominique told French television soon after his suicide, 'All these exceptional beings who give you the impression of so much assurance, they are all very fragile. They all have such strong moments of doubt.' But she and her daughters came to the rescue. And because of them, Bernard Loiseau has a living legacy in the world. BLOOMBERG
