BANGKOK: Ekniti Nitithanprapas, Deputy Prime Minister and Finance Minister, said at Government House on March 4 that the impact of the Middle East war on Thailand’s economy remained limited at present.
On the overall economy, the Office of the National Economic and Social Development Council (NESDC) presented the latest situation on March 3, noting that average crude oil prices across three benchmark markets and natural gas prices rose 12.9 per cent and 6.8 per cent, respectively, compared with February 27.
Global stock markets also declined, notably the S&P 500 index by -64.99, while the Stock Exchange of Thailand (SET) index fell -81.90.
The baht weakened slightly to THB31.55 per US dollar.
As for global oil prices, WTI rose by about five per cent to around US$75 per barrel.
However, the closure of the Strait of Hormuz would affect energy prices and energy transport going forward.
The meeting assigned the Ministry of Energy to expedite securing energy from additional new sources to reduce crude oil imports from the Middle East, which would help ensure sufficient domestic supply for use within the country.
At the same time, the ministry would manage the situation to prevent oil hoarding during the price rise and monitor to prevent price disparities among traders.
The meeting assigned the Ministry of Energy to take the following actions:
Secure additional energy import sources from other suppliers not yet affected, and report to the prime minister within one week.
Work with the Ministry of Finance to find ways to reduce the impact on domestic energy price levels. If oil prices rise further, tax measures may be considered if necessary. Other mechanisms may also be considered to maintain domestic energy price stability, so assistance can be provided to the public promptly if the situation is prolonged.
Work with the Energy Regulatory Commission to secure additional natural gas from other sources, alongside managing energy sources used for power generation to ensure they are sufficient and appropriate for the situation.
This includes considering additional contracts with neighbouring countries, such as Malaysia, for electricity generation.
The government is preparing to accelerate natural gas production from the Gulf of Thailand, the gas pipeline from Myanmar, and the Thailand–Malaysia Joint Development Area, and will submit the matter to the Cabinet next.
Phiphat Ratchakitprakarn, Deputy Prime Minister and Transport Minister, announced the results of the meeting assessing the Middle East conflict situation.
Phiphat said the Ministry of Energy’s report confirmed there was currently no shortage.
Thailand now has reserves of more than 90 days, which includes all volumes Thailand can import from sources worldwide.
Previously, the Ministry of Energy said supplies would be sufficient for 60 days, which referred only to the scenario in which Thailand could not import oil from the Middle East.
However, Thailand currently imports oil passing through the Strait of Hormuz at a proportion of only 50 per cent.
If oil supplies from other sources that do not pass through the Strait of Hormuz are included, this would amount to 90 days.
Sarawut Kaewtatip, Director-General of the Department of Energy Business, said Thailand’s current oil reserves of 60 days comprise 25 days of legally required reserves, 13 days of working stock, and 22 days of Thai-owned oil currently in transit through the Strait of Hormuz, which is gradually being delivered to Thailand.
Asked which oil sources Thailand would negotiate with to secure additional supplies, Sarawut said Thailand could expedite negotiations to purchase more oil from partners in the United States, West Africa, and other countries in regions from which Thailand already imports.
New contracts would focus on neighbouring countries and other high-potential countries in the region, such as Malaysia and other nearby countries, to secure additional purchase agreements and ensure a continuous inflow of oil into Thailand. - The Nation/ANN
