Piyasvasti Amranand, former energy minister and chairman of the Energy for Environment Foundation, said maintaining energy prices was just another populist policy and urgently needed to be addressed.
The National Council for Peace and Order has vowed to speed up energy price reform. So far, the junta has decided to keep the prices of diesel and cooking gas unchanged until the reform is finalised.
“Thailand has made mistakes [regarding price subsidies] for four years, and we’ve lost about 100 billion baht a year,” he told a forum on energy reform hosted by CIMB Bank yesterday.
“It is important to cancel fixed energy pricing, as it will yield benefits only in the short term. We should let market forces determine prices."
Venezuela, for example, has a large amount of oil reserves, but the country is facing financial problems due to the government keeping oil prices low for so many years, Mr Piyasvasti said.
Meanwhile, a proposal to scrap the Oil Fund might force many ethanol factories to close, while policies to promote renewable energies might not be attractive in the future, he added.
Pailin Chuchottaworn, president and chief executive of PTT Plc, agreed fuel price reform was vital, saying price structuring had been manipulated and was unfair to certain groups.
“I hope people accept the reforms, because there will be winners and losers, unlike with populist policies,” he said.
The price of crude oil in Dubai has risen to about US$110 per barrel from $103-105 before the conflict erupted in Iraq.
As long as the situation in Iraq does not escalate further, the oil price will remain at the current level, Mr Pailin said.
The situation in Ukraine is likely to affect the price of natural gas. Currently, it is summer in Europe, and the gas price will increase come winter.
Tevin Wongwanich, president and chief executive of PTT Exploration and Production Plc, said the global oil price would remain at about $100 a barrel until the Iraqi conflict was resolved.
Meanwhile, Thailand needs more petroleum exploration, as the country’s domestic reserves will last only eight years.
At present, Thailand relies heavily on natural gas from Myanmar. As infrastructure development has risen in the country, the Myanmar government might adjust policies regarding gas supplies to Thailand, Mr Tevin said.