Connect with us

Phuket

Businesses brace for impact of diesel hike

Legacy Phuket Gazette

Published

 on 

PHUKET: Businesspeople foresee price rises across the board due to the recent 4% rise in the price of diesel fuel, though they believe it will take some time before the impact is felt in the retail sector.

The 60-satang-per-liter price hike, announced last Tuesday, reflects the Energy Ministry’s inability to continue subsidizing diesel at a rate of 3 baht per liter.

The Ministry, which has already subsidized diesel to the tune of 68.8 billion baht since the beginning, now views the program as unsustainable in the face of rising diesel prices internationally.

Energy Minister Prommin Lerdsuridej said the government would not raise prices again this month because it wants time to assess the effect of the first hike on the economy.

Phuket Chamber of Commerce President Eam Thavornwongwongse told the Gazette that the increase, while necessary, would surely ripple through the entire economy.

He said prices at retail shops, especially in tsunami-affected provinces, would be closely monitored [by the Commerce Ministry] to ensure that any increases reflect real market pressures.

The Commerce Ministry recently issued an urgent request to more than 400 retailers asking them to freeze consumer-goods prices until the end of next month.

Tada Pitchayaporn of the Phuket Commercial Office, which will do the monitoring, said any associated rise in the retail sector should take at least a month because major retailers are sitting on large stocks. Intense competition in the retail sector should also act to ensure that prices would not rise until market forces cause them to, he said.

“If producers can continue to supply goods at current prices, retailers won’t have to pass on increases to consumers. No retailer wants to be seen as the first one to increase prices, as that would hurt customer loyalty,” he said, adding that any customers with evidence of price gouging could call his office (Tel: 076-213482; 076-212017) to make a complaint.

The Phuket branch of Big C was reported in the state-run media as having already announced a three-month price freeze, although the Gazette has been unable to confirm independently whether this is true or whether any other large retailers intend to follow suit.

Although the transport sector is already faced with increased costs, K. Tada said the Transport Business Association of Thailand has yet to agree to any rate increases among its members. He said that such increases were inevitable, however, due to the global trend of rising oil prices.

Still reeling from the affects of the tsunami, the local fishing industry is particularly alarmed by the increase.

Phuket Fishermen’s Association President Somyod Wongboonyakul told the Gazette that increased diesel prices would have a greater affect on small-scale coastal fishermen than on the owners of larger deep-ocean vessels.

Larger boats could still buy diesel sold tax-free by vessels operating offshore. The price under the government’s “green oil” program, which was set up to eliminate oil smuggling, will remain lower than those for diesel purchased on land, though they will also rise in line with actual costs.

Pointing out that fuel constitutes 60% of the operating costs of fishing vessels, K. Somyod said that when the green fuel price increases, many fishermen may find it no longer economically viable to go out to sea.

“There are at least 40 big fishing vessels in Phuket, about 10% of which are already staying in port as a result of the price hike. It’s possible that we will all stop working if it keeps going up,” he said.

He added that the National Fisheries Association of Thailand (NFA) would propose implementation of a new subsidy program to the government which ethe NFA is calling the “purple fuel” initiative. This would allow fishermen to buy fuel at reduced cost by using vouchers issued by the Fisheries Department.

Tour operators also expect to feel the pinch from the diesel fuel price hike in the short term. Wichai Ruangjaruwattana, Vice President of Phuket Tour Operators and Transportation Association, told the Gazette he expected it take about two weeks for the increase to affect their businesses. Fuel accounts for about 30% of operating costs, he said.

He added that he expected operators to try to reduce costs in other areas, such as payroll, in order to remain competitive and to continue helping to attract tourists back to Phuket.

 

Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram

image

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Coronavirus (Covid-19)25 mins ago

Record high as Chon Buri hits nearly 800 Covid-19 infections

Coronavirus (Covid-19)39 mins ago

Covid outbreak closes Nakhon Si Thammarat rubberwood processing factory

Thailand1 hour ago

Nearly 600 temples now offering free cremation services

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Thailand2 hours ago

Phetchabun chicken processing plant sees over 3,000 infections

Phuket2 hours ago

New Covid-19 infections drop, still worrisome for Phuket Sandbox

Phuket2 hours ago

Phuket “car mob” protest demands the removal of PM, calls for mRNA vaccines

image
Join the conversation on the Thaiger Talk forums today!
Thailand3 hours ago

Samut Sakhon Governor Veerasak offers to resign if communication in his province doesn’t improve

Coronavirus (Covid-19)4 hours ago

Sunday Covid Update: 15,335 new cases; provincial totals

Coronavirus (Covid-19)4 hours ago

Covid UPDATE: 15,335 new infections, provincial numbers

Coronavirus Infections4 hours ago

DDC says infections still rising, possibly falling in Bangkok

Coronavirus (Covid-19)5 hours ago

DDC says use the QueQ app to book appointment at sports stadium in Pathum Thani

Business6 hours ago

Inside story behind the Thailand property seachange

Thailand6 hours ago

Domestic flights added to Phuket/Samui, CAAT says be careful

Coronavirus (Covid-19)7 hours ago

4th body found on a Bangkok street

Events9 hours ago

Where have all of Thailand’s boat shows gone?

Thailand5 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism5 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket5 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism5 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand5 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism5 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand6 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand6 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand6 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand6 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand6 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand6 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand6 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand6 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand7 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8

Trending