Airs warning against populist energy policy
The chief executive of energy giant PTT, Pailin Chuchottaworn, yesterday called a press conference to deny several allegations against Thailand’s largest state enterprise and publicly listed company – and warn against any plan to impose a populist energy policy.
The news conference was held after the National Council for Peace and Order’s economic affairs head, Air Chief Marshal Prajin Chantong, last week reportedly ordered officials to complete a draft on energy structural reform this week “to address the high living expenses” of consumers.
Pailin said Thailand’s energy policy hinged on two sides of an equation: a free market versus populist policy.
He is a director of PTT.
“Actually, the real meaning of ‘reform’ is to make things right, which means someone has to take some pains. It is not populism,” he said.
The PTT chief reminded the public that before the deregulation of fuel prices executed by an unelected government in 1992, raising prices sometimes nearly resulted in the overthrow of a government.
“Unfortunately, an elected government changed a policy to cap the diesel price at Bt30 a litre, and since then nobody has dared touch it,” Pailin added.
To reinstate price controls on fuel and liquefied petroleum gas (LPG) fully, “We would have to find a big budget, which we don’t have. Many people may feel worried, like myself, that we are going back to populism.”
Pailin said a populist energy policy could put the future of 67 million Thais at risk, because at current consumption rates the country’s petroleum reserves would last for less than eight years – well below the international standard that calls for a minimum of 10 years.
“If you believe that we have oil that will last forever, then you can go for populism,” he said.
Because of insufficient oil reserves, PTT has to drill for petroleum abroad, and that requires it to have sufficient profits to fund the huge capital investment requirements.
Pailin cited PTT Exploration and Production’s recent deal in Mozambique, where it spent US$2 billion for an 8.5-per-cent stake in a petroleum block that has 65 trillion cubic feet of natural gas reserves.
To counter repeated attacks on PTT’s business conduct, he said the company was looking at either spinning off its retail fuel business and listing it on the stock market or re-branding its products or something else.
He said the Oil Fund should be retained to help stabilise fuel prices and secure an additional oil reserve for the immediate future, although for the long run the country should consider establishing a strategic oil reserve. It should be a minimum of 90 days of the oil-consumption rate, using $10 billion out of the Bank of Thailand’s $168 billion in foreign-exchange reserves.
He said that under an energy-reform programme, the interests of all Thais should be considered rather than only motorists or the 1.1 million consumers who drive LPG-fuelled vehicles.
He described as “totally groundless” an allegation that PTT was siphoning money through a “secret account” in the Cayman Islands, as well as a claim that he received a Bt4.7-million monthly salary. He said he received just over Bt1 million a month.
PTT booked a net profit of Bt94.65 billion on total sales revenue of Bt2.88 trillion last year.