War hitting Thais as rising fuel prices make consumer goods more expensive

The Commerce Ministry has ordered a freeze on increasing the price for 18 groups of goods and services despite repeated calls from manufacturers since late last year for prices to be adjusted in line with rising production costs.

Under the ministry’s decree, the price freeze applies to instant noodles, fresh food, canned food, bagged rice, seasoning sauce, cooking oil, carbonated drinks, milk and milk products, electrical appliances, washing products, fertiliser, pesticide, animal feed, iron, cement, paper, medicine and medical products.

However, the private sector, including the Thai Chamber of Commerce and Federation of Thai Industries, say price increase will be inevitable for as long as business entrepreneurs continue facing higher costs from the constant rise of petrol prices.

Wattanasak Sur-iam, Department of Internal Trade director-general, said the Commerce Ministry will allow prices to be raised on a case-by-case basis, along the lines of the principle that “consumers must not be too affected while producers can survive”.

The global price of crude oil has risen beyond US$110 per barrel as the military conflict between Russia and Ukraine worsens. Russia is a major supplier of oil and natural gas, while Ukraine is a major producer of agricultural products.

Thai consumers have been hit with rising prices for fresh food, including pork, chicken and eggs, as well as ready-made and freshly made food.

In February, Thailand saw a record inflation rate of 5.28 per cent – the highest in 13 years.

Meanwhile, Ronnarong Phoolpipat, director of the Commerce Ministry’s Trade Policy and Strategy Office, said inflation is spiking in Thailand due to the Russia-Ukraine war, not the state of the Thai economy or value of the baht.

“If the price of oil continues to stay above $110 per barrel, inflation will remain high,” he warned. “Inflation should stay within a manageable limit set by the Bank of Thailand. If necessary, the central back will certainly issue some measures.”

In February, some 260 items saw an increase in price, including electricity, tap water, fuel, pork, rice and curry, cooked food, cooking oil and eggs.

Meanwhile, the price of 65 items remained the same, including mobile phone and internet services, while 105 items became cheaper, such as oranges, ginger, chilli, banana and postage fees.