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