Pundit calls for smarter energy policies

Populist price caps risk future energy problems, write Yuthana Praiwan and Lamonphet Apisitniran

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Fuel dispensers at a Bangkok filling station. Universal subsidy programmes for energy prices have proven not to ease people's living costs over the long term, notes an analyst.

(SOMCHAI POOMLARD)

Political parties are urged to make smarter decisions to address living costs in the energy sector as previous price subsidy schemes were unhealthy for the economy, says Praipol Koomsup, an economist at Thammasat University who was an assistant to former energy minister Narongchai Akrasanee.

Politicians promising to put a cap on power bills as well as fuel prices without thinking about the long-term impact can cause problems down the road, he said.

Mr Praipol, along with business leaders in the manufacturing sector, is dissatisfied with this old-fashioned approach to enhancing consumer purchasing power, which usually results in budget overspending to curb energy prices or the provision of cash handouts.

Plans to keep diesel and electricity prices affordable for businesses and households should not be based on a universal subsidy concept, in which people from all walks of life benefit from the scheme, he said.

"This strategy piles up financial burdens on the state Oil Fuel Fund," said Mr Praipol.

The fund serves as a buffer against surges in global crude oil prices, but it has limited money to regulate the prices of diesel, gasoline and gasohol to please motorists all the time.

"The universal subsidies are not good for long-term economic growth," he said.