Commerce holds prices until March 17 as diesel support under review

Ministry of Commerce has urged businesses to hold prices on consumer goods until March 17, the same day the Energy Ministry’s 15-day diesel price support measure is set to expire.

The ministry said decisions on whether to allow price increases will depend on whether the government extends the diesel support scheme, which has capped fuel costs during the recent surge in global oil prices.

The Department of Internal Trade has asked wholesalers and retailers nationwide to cooperate in keeping prices unchanged until March 17. The government has previously considered gradually raising the diesel price ceiling by about 0.5 baht per litre.

Commerce Minister Suphajee Suthumpun said it was currently unreasonable for businesses to cite diesel costs as a justification for raising product prices. She added that the ministry would investigate and take legal action against businesses that attempt to take advantage of the situation.

The Trade Policy and Strategy Office (TPSO) is also monitoring cost structures for 59 controlled products, including instant noodles, canned fish, rice, eggs, palm oil and animal feed, as well as other goods likely to be affected by higher oil prices.

The office has prepared price impact scenarios based on three crude oil levels: $80, $100 and above $115–120 per barrel. Under the modelling, egg prices could rise between 3.6% and 12.4%, while fast food prices could increase by around 10% if cooking ingredients become more expensive.

 

Nantapong Chiralerspong, director of the TPSO, said the experience of the 2022 Russia–Ukraine war showed how energy prices can drive inflation. At that time, average crude oil prices of about $97 per barrel pushed Thailand’s inflation rate to 6.08%.

The Commerce Ministry has instructed provincial commerce offices nationwide to inspect goods linked to energy costs. If businesses seek permission to raise prices, approvals will be granted only if increases reflect genuine cost changes.

Three channels of price impact

Authorities said rising oil prices could affect consumer prices through three main channels:

1. Direct impact: The consumer price index rises immediately through higher energy prices, including retail fuel prices, electricity tariffs and cooking gas.

2. Indirect impact (cost pass-through): Energy is a major production and logistics cost. Higher oil prices can push up transport costs, packaging, plastics and chemicals. Processed food is considered the most vulnerable category, accounting for 16.9% of the inflation basket.

3. Structural impact: Households may face a prolonged cost-of-living squeeze as purchasing power weakens. SMEs may struggle with rising costs, shrinking margins and liquidity pressures, potentially affecting export competitiveness.

Officials also warned that past experience shows prices often fail to fall even after oil prices decline, particularly for processed foods, creating lasting pressure on living costs.

Food and fertiliser prices under close watch

Wittayakorn Maneenet, director-general of the Department of Internal Trade, said provincial commerce offices have been instructed to monitor prices of controlled goods and key products such as instant noodles, canned fish, rice, eggs, cooking oil and chemical fertilisers.

For imported raw materials affected by rising oil prices, authorities will examine cost structures to determine whether price adjustments are justified. The ministry is also preparing measures such as affordable fertiliser programmes and alternative import sources, including Oman, Malaysia and Brunei.

Businesses warn of rising costs

Poj Aramwattananont, chairman of the Thai Chamber of Commerce and the Board of Trade of Thailand, said the Middle East conflict is pushing up energy prices that directly affect exporters, international logistics and industrial production costs.

He said the private sector is closely monitoring developments and coordinating with government agencies to assess risks and develop recommendations to help businesses adapt to potential disruptions.

Packaging, palm oil and wheat costs rising

Pun Paniangvait, president of Thai President Foods Plc, the maker of instant noodle brand Mama, said the company could absorb higher costs for the next three to four months, although profits may decline slightly.

He estimated the impact at about 1.4%, noting that plastic packaging costs have risen 20%, with packaging accounting for about 7–8% of total production costs. Instant noodles are classified as a controlled product and cannot have their prices increased without government approval.

Transport costs have also risen due to fuel supply restrictions affecting refuelling for delivery vehicles. However, government fuel subsidies have so far prevented businesses from using fuel prices as a justification for raising product prices.

Pun said that after the energy price support measures expire, companies will need to assess how far oil prices continue to rise. If diesel increases by about 5 baht per litre, the impact would still be manageable.

However, if global prices of palm oil and wheat rise alongside higher transport and packaging costs, companies may need to seek permission from the Department of Internal Trade to adjust prices.

The last price increase for instant noodles followed cost discussions in November 2021, with approval granted in March 2022 and prices raised in August 2022.

The Commerce Ministry plans to hold talks with businesses on March 16, 2026, to explain price control measures aimed at protecting consumers.

“If the US–Iran conflict lasts for three to four months, we can manage. Beyond that, it will be difficult to estimate the impact,” Pun said.

PET packaging costs surge

An industry source said the cost of PET plastic packaging used for beverage bottles has already risen 40%. For drinks sold in convenience stores, around 50% of the retail price goes to retailer margins, meaning producers are already absorbing significant cost pressures.

Fuel limits affecting logistics

Sathien Sathientham, chief executive of the Carabao Group, said the biggest concern from the US–Israel–Iran conflict is the impact on consumer purchasing power.

With oil prices already above $100 per barrel, diesel could rise by 9–10 baht per litre, potentially reaching 40 baht per litre, which would increase transportation costs, travel expenses and electricity prices.

He added that Carabao’s nationwide logistics network is already facing operational difficulties. Trucks delivering goods to 2,000 CJ Supermarket branches sometimes cannot refuel fully due to fuel purchase restrictions, forcing drivers to search for additional stations and creating hidden costs.

Companies can hold prices for three months

Sathien said the company could maintain current retail prices for around three months, despite rising production costs.

Carabao has sufficient raw materials for about 45 days and has diversified supply sources, including switching some imports from Germany, France and the UK to China.

“In the short term we can absorb the cost pressures and keep prices unchanged, even if oil prices rise further,” he said. “But the bigger concern is declining consumer purchasing power and rising living costs.”

Beer prices already rising

After more than two weeks of fighting between the US, Israel and Iran, some products have already announced price increases.

Thai Beverage Plc has raised the price of Chang Cold Brew beer. The 490ml can pack now costs 589 baht per carton, up 20 baht from 569 baht, while the small 320ml bottle pack has risen 8 baht per carton to 826 baht.

Reports also indicate that Chang Classic beer products — including cans and bottles — may see price increases of 8–15 baht per carton after March 15.

TOA suspends new orders

Meanwhile, TOA Paint (Thailand) Plc has informed customers and business partners that it is temporarily suspending new orders due to supply chain disruptions.

The company said the Middle East conflict is directly affecting petrochemical raw materials and international shipping. Rising oil prices and longer shipping times are increasing costs.

Existing orders will still be processed, but the company said it cannot guarantee delivery quantities, advising partners to adjust their business plans accordingly.