Thailand PM Urges WFH as Iran Energy Crisis Hits Supplies

Anutin Charnvirakul, the Prime Minister of Thailand, has this week called on his citizens to work from home wherever possible, as the government looks to mitigate the worst effects of the global energy crisis.

Currently, Thailand is dependent on imports for roughly half the oil it consumes and in recent weeks the escalating conflict in the Middle East has made that vulnerability difficult to ignore.

While it has been several weeks since US-Israeli airstrikes first hit Iran and closed the Strait of Hormuz, most economies are only just beginning to feel the full impact of fuel shortages.

In South East Asia, the last unaffected shipments of oil and gas from the Gulf have now been delivered, meaning that the reserves of countries like Thailand are now starting to dwindle.

The Prime Minister has warned the people of Thailand that attacks in the Middle East have increasingly targeted infrastructure and oil refineries, raising the risk not just of rising prices but of Thailand struggling to secure oil imports whatsoever.

With US President Donald Trump still threatening to “obliterate” Iran’s energy infrastructure if the Iranian government refuses to reopen the Strait of Hormuz, capacity could be devastated further still.

In a statement posted to social media on Monday 6 April, Charnvirakul discussed the stakes plainly.

“The shortfall in fuel and gas supplies in the Middle East has made it more difficult to source them elsewhere,” he said.

“The government chooses to announce this fact so that the people will understand and are ready to adjust and cope with the situation.”

What the Thai government is asking

Officials at government organisations and state enterprises have already been ordered to work from home and suspend planned overseas inspection and conference trips.

Now, the government is extending that request to the private sector, calling on businesses and self-employed people to follow suit wherever possible.

“I also request the cooperation of all citizens and the private sector to conserve energy in the same way, whether it's through WFH (work from home) or WFA (work from anywhere), reducing the use of personal cars and switching to public transportation, carpooling and using electricity responsibly,” the Prime Minister said this week.

The Ministry of Energy has also proposed a few mitigation strategies to reduce energy consumption in workplaces:

• Air-conditioning systems should be set to between 26°C and 27°C
• Employees should wear short-sleeved shirts without neckties, except during ceremonies
• Use of elevators and photocopiers should be reduced
• Virtual meetings should be favoured over in-person meetings

Reserves, rationing and rising costs

According to some reports, Thailand has around 95 days of energy reserves remaining. As such, the government has been looking for new sources of liquefied natural gas from countries including the US, Australia and South Africa.

Despite these efforts, prices have already begun to climb for consumers.

Diesel has risen above 50 baht per litre (US$1.54) – up from around 30 baht (US$0.92) just weeks ago.

The surge is being felt acutely in the agriculture and transport sectors, both of which are heavily dependent on fuel. Industries like this currently have little capacity to absorb costs of this magnitude.

The timing is especially painful for Thailand’s tourism industry, which is preparing for Songkran, Thailand's traditional new year holiday. 

Ordinarily, Songkran is a period that draws both domestic travellers and foreign visitors to cities such as Chiang Mai and Bangkok for the country's famous water festivals, though catering for tourists may quickly become an unmanageable burden.

On top of that, the disruption of flight paths and the spike in the price of international travel could seriously dampen footfall.

“Although Thailand has high oil reserves compared to other countries, we remain vulnerable as a country that imports a large volume of oil,” says Prime Minister Charnvirakul. 

“We cannot remain complacent and manage our oil resources as we have done in the past.”

A familiar pattern across the region

Thailand is far from the only country in Asia to be feeling the latent effects of the conflict in the Middle East.

Across the continent, governments are scrambling to contain the economic fallout from the energy shock.

Both Sri Lanka and the Philippines have introduced four-day working weeks for much of their public-sector workforce, while Vietnam has similarly called for people to work remotely whenever they can.

Meanwhile, Indonesia has announced a 28% rise in the surcharge on jet fuel and said it would allow airlines to raise domestic ticket prices by up to 13%.

For now at least, the message from the politicians to the people is one of resolve and patience.

“We are facing a global crisis and we will get through it,” says Charnvirakul. “I would like the people to cooperate.”