The Middle East conflict has sharply increased LNG prices by disrupting supply, especially from Qatar, driving up global and Thai electricity costs. Thailand should adopt flexible tariffs, boost clean energy, and improve efficiency.
Impact of Middle East Conflict on LNG Prices
The Middle East conflict has caused liquefied natural gas (LNG) prices to surge by over 91%, rising from USD 10.7 to USD 20.5 per million BTU between February and April. This spike was triggered by supply disruptions, particularly damage to Qatar’s Ras Laffan gas field, which accounts for 17% of its capacity, reducing global LNG supply by 3%. Recovery of this supply is expected to take 3–5 years. Persistent disruptions and high demand in Asia and Europe will keep LNG prices elevated, though increased U.S. production and alternative energy adoption should help balance supply and demand after two years.
Rising Electricity Costs and Tariff Implications
Thailand faces higher electricity generation costs due to increased LNG prices and supply disruptions. Imported natural gas costs push electricity prices up to around THB 4.9 per unit by the end of 2026. However, maintaining EGAT’s debt at THB 36 billion could moderate tariff rises to approximately THB 4.0 per unit in 2026–2027. Prolonged conflict or further damage could drive LNG prices to USD 36.1 per million BTU and tariffs near THB 5.7 per unit. Flexible tariff adjustments and energy management will be crucial to controlling costs.
Recommendations for Government and Consumers
The government should implement both short- and long-term strategies to manage electricity costs, including gradually adjusting tariffs, increasing energy imports, enhancing renewable energy capacity, and exploring small modular nuclear reactors. Public communication about energy costs is essential. Households and businesses must improve electricity efficiency by using energy-saving devices, avoiding peak usage, and investing in rooftop solar systems. These efforts will help reduce dependence on LNG and strengthen Thailand’s energy security sustainably.
