Thailand’s Three-Phase Contingency Plan for Energy Crisis
The Thai government has unveiled a comprehensive three-phase contingency plan to address a potential full-scale energy crisis, which could arise from the ongoing conflict in the Middle East. This plan includes measures such as fuel rationing and limited operating hours for petrol stations and shopping malls, should two critical maritime chokepoints be closed.
Nuttaa Mahattana, a spokesperson for the Centre for Monitoring the Situation in the Middle East, outlined the planning process during a recent briefing. She emphasized that the strategy takes into account three key issues: the evolving risk in the Middle East and its implications for Thailand’s energy management, examples of how other countries have responded as risks increased, and the measures being implemented by the Ministry of Commerce.
Tensions in the Middle East continue to escalate, with growing concerns about the Bab el Mandeb Strait in the Red Sea, which is a vital route for oil and commercial shipping. Although Thailand has successfully negotiated passage for its vessels through the Strait of Hormuz, there are fears that the Bab el Mandeb Strait could also face disruption.
Ms. Nuttaa, a former political activist and social media influencer who recently joined the government monitoring center, explained that the Ministry of Energy has prepared for three scenarios:
- First Scenario: Rising risk with limited impact, such as slower shipping.
- Second Scenario: Closure of the Strait of Hormuz for more than one month, but with crude imports continuing and domestic refineries adjusting output to meet demand.
- Third Scenario: A complete halt to crude imports due to the closure of both straits.
Current Status and Mitigation Measures
Thailand is currently assessed to be at phase 2, specifically level 2.2, where no oil shortages have emerged, and the situation is expected to ease within a month. To mitigate risks, authorities have diversified import sources, adjusted refinery production—six refineries are currently operating at 109-110% of normal capacity—increased the blending of biofuels to reduce crude oil imports, and restricted exports to essential uses only.
The energy ministry is reviewing the possibility of escalating measures should the situation deteriorate to phase 3, she said. Contingency plans were already in place as part of proactive planning.
Regarding B20 diesel, Ms. Nuttaa noted that it can only be used in vehicles certified by manufacturers, primarily trucks and pickup trucks. Standard diesel is B7, or 7% biofuel. Currently, 15 makes support B20 use, and vehicle owners are advised to verify compatibility by model or consult the Department of Energy Business website.
Global Responses to Energy Risks
As the Middle East risks intensify, many other countries have also stepped up measures to protect their populations. For example:
- South Korea imposed a five-day-a-week vehicle usage limit for government agencies since March 25, a move expected to save more than 3,000 barrels of oil per day.
- France and the United Kingdom implemented targeted fuel subsidies and allocated budgets to assist low-income households.
- Jordan banned the use of air conditioners and water heaters in government offices and prohibited the use of official vehicles.
- The Philippines declared a national energy emergency to enable stricter legal enforcement.
- Egypt instructed some public employees to work remotely, postponed state projects, and ordered shops to close earlier, at 9pm.
Rationing and Fuel Price Adjustments
Also speaking during the briefing, Weerapat Kiatfuengfoo, deputy permanent secretary for energy, explained that under a phase 3 energy crisis, the government would impose strict controls on fuel consumption. Oil rationing would prioritize essential services such as hospitals and ambulances, alongside measures including set operating hours for petrol stations, controls on electricity use, and adjusted opening hours for shopping malls to match available energy supplies.
Ms. Nuttaa emphasized that although global pressure on the conflicting parties could help ease tensions, Thailand must prepare for a worst-case scenario and avoid complacency. She also explained that fuel price adjustments were announced late at night to prevent hoarding and chaotic shortages at petrol stations. With Thai pump prices lower than in some neighboring countries, failing to adjust prices could encourage illegal fuel exports for profit.
Pornchai Jirakulpaisal, director of policy and planning at the Oil Fuel Fund Office, highlighted the volatility of global oil prices, with sharp differences between daytime and nighttime trading. As a result, the fund’s management committee must wait until the Singapore market closes around 7-8pm to calculate prices in baht and assess the fund’s status and economic impact, leading to price announcements at 8.30 or 9pm each day.
He noted that the fund is currently absorbing a significant burden. For example, when retail prices rise by 1.80 baht per litre, the fund adds a further 2.90 baht per litre in subsidies. This has resulted in daily cash outflows of around 1.5 billion baht and an accumulated deficit of 42 billion baht. Any additional borrowing requires legal procedures and cabinet approval.
