AS energy shortages may occur during the current US-Israeli war on Iran, with this being a weak point of the Thai economy, the main challenge for the new government will be building energy security and coping with rising energy prices, People’s MP Anusorn Tamajai said today (Mar.8).
Amid the looming energy shortages there is a high possibility of Thailand facing stagflation (economic stagnation and recession with high inflation), along with many other Asian countries that rely on imported oil.
Inflation will rise due to supply-side factors and production costs. This will replace
the previous negative inflation or deflation caused by weak aggregate domestic demand, said Anusorn, who was formerly chairman of the Audit Committee and director of Bangchak Petroleum Plc.
The price of crude oil futures contracts in the global market has risen by more than 35% in the past week with this being the largest weekly increase since 1983.
Currently, several oil refineries in the Middle East have stopped production, and most recently, there was an attack on oil facilities in Iran.
If the price of crude oil in the global market exceeds $120 per barrel, new price subsidy measures may be needed.
Amid these challenges the government should avoid fiscal risk and sending the wrong signal by using energy inefficiently, he cautioned.
While agreeing with subsidising diesel prices via the Oil Fuel Fund mechanism, this fund will likely return to the negative territory soon. Previously, the fund was in positive territory after being in negative territory for four consecutive years, with the deficit at the end of 2022 reaching 130 billion baht.
Anusorn suggested that energy policy should proceed with four main strategies being implemented simultaneously with these being as follows:
– A power generation and energy security plan;
– An energy conservation and efficient energy use plan;
– Renewable and alternative energy development plan;
– The greenhouse gas reduction plan.
“Energy conservation through efficient energy use and energy saving is the key to solving this oil crisis, as Thailand has low energy reserves and is highly dependent on imports.
“Investing in renewable energy projects such as solar power and photovoltaic (Solar PV) systems is crucial for Thailand’s energy security,” he said.
The economies of East Asian countries that rely on energy imports will be severely affected by the war in the Middle East, especially Japan where inflation will rise significantly, he warned.
Japan has long used a low interest rate policy to stimulate its economy and combat deflation. In the past, the very low interest rate on the yen led to large funds worldwide borrowing Japanese yen at very low (or negative at times) interest rates, to convert it into other major currencies, especially the US dollar, so called Yen Carry Trade, to invest in global financial markets, including stocks, bonds, and commodities, to profit from the interest rate differential and higher returns than elsewhere.
When inflation occurs in Japan, it will pressure the Bank of Japan to raise its policy interest rate.
Anusorn foresees that there will be unwinding of Yen Carry Trade positions with large investors rushing to sell risky assets globally to repay yen-denominated loans.
This will cause global financial markets to remain volatile and continue to experience downward corrections.
CAPTIONS:
Top – Two women from the Iranian Red Crescent Society stand as a thick plume of smoke from a US-Israeli strike on an oil storage facility late Saturday rises in the sky in Tehran, Iran, on Sunday, Mar. 8, 2026. Photo – AP /Vahid Salemi and published by Yahoo!News
Insert – People’s MP Anusorn Tamajai. Photo – Naewna
Front Page -3D-printed oil barrels, an oil pump jack and a map showing the Strait of Hormuz and Iran appear in this illustration taken March 2, 2026. Credit – REUTERS/Dado Ruvic/Illustrati and published by CNA
Also read:
215 Thais evacuated in Middle East so far
BA confident of Thai tourism industry despite Middle East turmoil
Fertilizer retailers fear prolonged war will drive up prices
Thai embassy in Iran temporarily moves to Turkey
US hasn’t asked to use U-Tapao Airport: Minister
Lesson from Tehran: Unsecured surveillance cameras are a tool for opponents
Public urged to not hoard fuel with diesel price fixed for 15 days
Yodchanan tipped to be named Pheu Thai leader
Newin to have final say over Bhumjaithai ministerial seats
100 party-listed, designate-MPs initially verified
People’s to file duty-negligence, misconduct lawsuit against Election Commission
