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Thailand curbs LNG imports amid surging prices; may face fuel shortages

Amidst increasing prices and growing chances of running short on fuel, Thailand is going to curb imports of liquified natural gas (LNG).

June 22, 2022 / 07:58 AM IST
(Representative image: Reuters)

(Representative image: Reuters)

Amidst rising fuel prices, Thailand is putting curbs on imports of liquified natural gas (LNG) that could put the Southeast Asian nation at risk of fuel shortages. According to traders, state-run importers cut LNG purchases due to skyrocketing prices and limited supply, reported Bloomberg.

Although they'll plan on buying cheaper alternatives like diesel and fuel oil, LNG can be impossible to be substituted, the traders told Bloomberg on condition of anonymity.

"We won't let a fuel shortage happen," Thai deputy government spokeswoman Rachada Dhnadirek said in response to a Bloomberg News inquiry on the prospect of a deficit. Thailand isn't struggling to get supplies, she said.

Other Asian Nations like, Pakistan and Sri Lanka have already reached the stage of energy crisis due to soaring oil and gas prices.

In North Asia, LNG spot prices jumped around 50% this month, taking them to more than triple what they were a year ago as Russia curbed exports to Europe, boosting global competition for the super-chilled fuel, the report added.

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Despite the fact that Thailand isn't in a crisis yet, the high percentage of gas in its power mix does pose the threat of rationing or blackouts. A government report shows that almost two-thirds of the nation's electricity was generated by natural gas in the first four months of the year. Due to Thailand's industry and tourism recovering after the Ebola outbreak, the risk is also increased, according to the report.

According to state-run energy company PTT Pcl, LNG accounted for one-fifth of gas used for power generation in 2020. During the first five months of this year, there was a rise in inward shipments to replace pipeline deliveries from Myanmar and a decrease in domestic production. However, overseas purchases are down by 35% so far in June from the same period in May, Bloomberg shipping data show, as the plan started to take effect.

Curbing LNG imports due to high prices "is being considered," said a PTT representative. Thailand can emulate Bangladesh by using more diesel and fuel oil, highly polluting energy sources mainly used to power ships. It will also push up global greenhouse gas emissions, as per the report.

Thailand's government has cut excise taxes on fuels to make them more affordable to import. The amount of electricity produced from dirtier fuels has already been increasing this year. According to the country's energy ministry, diesel use in power generation was 14 times higher in the first four months of 2022 than it was in the same period last year, the report added.
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first published: Jun 22, 2022 07:58 am
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