Thailand’s Minister of Energy is reportedly scheduled to meet with the Energy Regulatory Commission to determine the electricity rate for the next period (May to August), using cost calculations and support from multiple stakeholders to keep prices steady at 3.88 baht per unit.
Kasikorn Securities (KS) views this intervention as negative for the power generation sector, noting that energy costs have been increasing, particularly for imported LNG, which has surged more than 70% to around $18-20 per mmbtu compared to prices before the Middle East conflict began in February.
As a result, SPP operators are expected to see a significant narrowing of profit margins unless state authorities provide compensation or subsidies.
The brokerage estimates that the price differential in electricity bills will shrink from roughly 1.4 baht per unit to about 0.7-0.8 baht per unit. This reduced spread could cut profit by 30-40% for power companies, especially BGRIM and GPSC, should the government extend the price freeze until year-end.
Following these, Kasikorn has maintained a ‘Neutral’ outlook on the utilities sector and highlights GULF as its preferred stock pick.
