Slight impact on inflation: Research
The cooking gas price increase will send slight impacts on household expense as well as inflation, said Siam Commercial Bank's research centre.
When the cooking gas price is fully raised by Bt6 per kg in 2014, for a household consuming 15kg per month, its monthly expense will rise by Bt90 per month or only 0.4 per cent of average household income, it estimated.
From September 1, the retail price of liquefied petroleum gas for household use would be raised by 50 satang per kg to Bt18.63. It would be raised by 50 satang monthly until the price is raised by Bt6 per kg.
The higher gas cost will raise fastfood dish by only 35 satang per dish. Even though food vendors may take this opportunity to raise prices, it would not drive inflation significantly, the Economic Intelligence Centre said. The centre forecast 2.4 per cent inflation in the fourth quarter.
Meanwhile, it noted, the adjustment will reduce the Oil Fund's subsidies estimated at around Bt3-Bt4 billion a month, and will lead to higher energy efficiency and hence lower imports. Smuggling to neighbouring countries - where cooking gas price is 100-200 per cent higher - would also drop. Illegal smuggling of gas for household use to the transport and industrial sectors, which are subjected to the higher prices of Bt21.83 and 30.13 per kg, would also fall.
