A Citizens' Guide to Energy Subsidies in Thailand

By Tara Laan on April 14, 2013

Thailand has stabilized and subsidized energy prices for decades in an effort to shield consumers from volatile energy prices and improve access to energy.

Despite significant reforms to deregulate parts of its fuels market, Thailand's subsidies for fuel and electricity totalled at least THB 195 billion (US$6.8 billion) in 2012. Fuel and electricity subsidies are clearly benefiting some consumers, including the poor, who rely on subsidized liquefied petroleum gas (LPG) for cooking and free electricity. However, evidence shows that energy subsidies have unintended consequences for the economy, the environment and social equity. They strain public finances, encourage overconsumption, and benefit wealthier citizens far more than the poor.

Eliminating these subsidies poses considerable challenges. Energy access and affordability are critical factors for development. In addition, poor households, which typically spend a larger share of their income on energy, are highly vulnerable to spikes in fuel prices. Thailand is in the midst of facing these challenges as the government phases out several energy subsidies.

Citizens have a vital stake in this debate, but, as in many countries, there is all too often little solid information on the exact costs and benefits of subsidies. When information is available, it can be scattered across many sources and relate to different fuels, time periods or sectors of the economy. A Citizens' Guide to Energy Subsidies in Thailand, produced with the assistance of the Thailand Development Research Institute (TDRI), gathers the best available information on the costs and benefits of energy subsidies. The Guide is intended as a resource for civil society groups and journalists to use in their efforts to engage the public on energy subsidies and their reform.

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IISD, 2013