Ministry: Gas-price float won't raise prices

Pussadee Kampanthong, deputy director-general of the Internal Trade Department, said yesterday that NGV and LPG price increases will have only a small impact on goods prices, pushing up inflation by only 1 per cent.
The government has decided to float NGV and LPG prices between Bt3 and Bt6 this year, with NGV to be adjusted by 50 satang on January 16. The decision spurred taxi drivers to protest against the policy yesterday. In addition, businesses have expressed concerns about higher production costs and transportation expenses. She said that manufacturers should not cite the NGV price adjustment to increase the prices of their goods, as it will create only a small impact on logistics costs.
“The department will not allow any manufacturers to increase goods prices due to an increase of the gas price as it has not directly raised production costs. Enterprises should focus on increasing their logistics-management efficiency in order to reduce their operating costs,” she said. According to a department study, products that will be hardest hit by increasing the cost of gas are cement, followed by plastic pipes, electric fans, drinking water, detergent and paper napkins, as they have to face higher logistics costs. The price of these goods will increase by only 0.4-3.8 per cent.
Pussadee added that so far, no producers have asked for the department’s permission to increase their retail price. Rice packers are expected to ask to be allowed to raise their retail prices by 5-10 per cent, but have not done so yet.
Phongsak Assakul, chairman of the Board of Trade of Thailand, said the price increase of NGV and LPG will not prompt manufacturers to adjust retail prices due to high competition.
Payungsak Chartsuthipol, chairman of the Federation of Thai Industries, agreed with the government policy to float the gas price after a long period of subsidisation. The government should focus on the market mechanism to adjust the price and create measures to alleviate those affected, Payungsak said.
Meanwhile, the Internal Trade Department will soon announce recommended prices for 20 cooked food dishes in order to curb the rising cost of living.
The department’s director-general, Vatchari Vimooktayon, said the price recommendations would be announced on January 20. The measure came out after the department found that the retail price of cooked food has risen in the past year from Bt25-Bt35 per dish to Bt35-Bt45 per dish.
The recommended price will be introduced at food courts, fresh markets and office buildings as well as for street vendors.