Reduced fuel prices to keep inflation low, Thai ministry says

[webfact]

Reduced fuel prices to keep inflation low, ministry says
Petchanet Pratruangkrai
The Nation

BANGKOK: -- Inflation should be lower in the remaining months of the year thanks to lower fuel prices, but the economy has not yet grown significantly this year, according to the Commerce Ministry.

The ministry yesterday reported that the Consumer Price Index in August marked three consecutive months of slow growth, at 2.09 per cent year on year, and dropped by 0.08 per cent compared with July this year.

The average annualised inflation rate in the first eight months was 2.21 per cent.

"Inflation will be low as most prices are expected to remain unchanged, while the economy has not shown a significant expansion because of lower prices of agricultural crops," said Amparwon Pichalai, director of the ministry's Trade Policy and Strategy Office.

The ministry projected an inflation rate of 2.2 per cent in the final quarter of the year, while average inflation in the second half will be 2.18 per cent.

Full-year inflation will be about 2.21 per cent, within the ministry's forecast of 2-2.8 per cent.

However, the ministry needs to monitor oil prices in the global market closely, as they could increase next quarter and cause higher inflation. The political conflict between Russia and Ukraine could affect this situation.

Currently, the ministry's inflation projection assumes Dubai crude oil will average US$110-115 per barrel.

Inflation in August was low because of the decision by the military's ruling National Council for Peace and Order late last month to reduce some fuel prices by between Bt1 and Bt3.89 per litre, while increasing the retail price of diesel by 14 satang per litre.

The ministry reported that lower domestic fuel prices had lowered the inflation rate by 0.0191 percentage point a month, or by 0.076 percentage point in the remaining four months of the year.

However, as expected increase in the price of liquefied petroleum gas (LPG) in the remaining months would have a slight impact on inflation, by 0.0008 percentage point a month. And if the LPG price increases next year, it will drive up the inflation rate by 0.01 percentage point.

In August, from the ministry's inflation basket of 450 items, the prices of 159 products increased, compared with 178 in July, while 91 remained unchanged and 200 items decreased from the previous month.

Source: http://www.nationmultimedia.com/business/Reduced-fuel-prices-to-keep-inflation-low-ministry-30242292.html


-- The Nation 2014-09-02

[chainarong]

Reduced pegged fuel rices are just window dressing leading to a bigger problem , until Thailand has a free market the inflation rate is false and not to be believed, in other words B/S, you are governed by world parity fuel pricing, whether Thailand likes it or not , when Thailand lifts the pegged fuel prices and it has jumped 90 setang how are you going to explain increase charges and costs , Thaksin did this and got into all sorts of trouble , long term Expats will remember service stations closing at 6pm to save fuel costs against the government coffers and how many companies went to the wall when the pegged price was lifted?????

[alant]

only petrol based products were lower I recall, hauling good in a diesel truck will not reduce in cost.

[Gsxrnz]

I bet some Western economists would love to know how the Thai economists can calculate economic factors to four decimal places.

[maoro]

Yes diesel prices were increased.

Many private vehicles here are using diesel and many trucks use gas.

The motor bike owners will save a little bit.

Without the figures though hard to say, but hard to see much difference to inflation which is only running at about 2.2% pa currently, can't see too much problem with that as it seems to be a low figure in any case.

[kimamey]

Yes diesel prices were increased.

Many private vehicles here are using diesel and many trucks use gas.

The motor bike owners will save a little bit.

Without the figures though hard to say, but hard to see much difference to inflation which is only running at about 2.2% pa currently, can't see too much problem with that as it seems to be a low figure in any case.

2% doesn't seem bad so long as they can keep to that in the longer term. It's the same as the target set by the Bank of England.

[FireMedic]

Just on a side note....I have driven by a ton of stations and I haven't seen one with reduced prices.

[tonbridgebrit]

Reduce fuel prices to keep inflation low is a good idea. Just make sure you do it on petrol AND diesel.

Tax on fuel is a REGRESSIVE tax, it hits the low-income people more than it hits the rich. And fuel subsidies are paid for by tax money, the rich pay more tax than the poor (and if they don't, well, make sure they do).

How many people benefit from cheaper fuel ? How many people are unhappy because of the jump in their tax bill ? As long as the number of people who are unhappy about the jump in their tax bill is SMALLER than the number of people who are smiling due to subsidised fuel, that means it's okay.

Thaksin doing it, or the junta doing it, as long as it benefits more people than it harms, good, let's do it.

[worgeordie]

The 2% inflation figures is a myth,especially when it comes

to everyday things like food,and if you have cash,its slowly

draining away due to the REAL rate of inflation.

regards Worgeordie

[connda]

In the US, fuel prices and food are not included in the official government published inflation figures, thus the US has low inflation.

Thailand needs to enter the 21st century and get with the programs if they aspire to 'first world status'.

Remember: "There are three kinds of lies: lies, damned lies, and statistics." - Mark Twain

[Chris Lawrence]

Someone has to pay? The petrol scheme, but what about diesel and gas; not many would be using petrol in their delivery vechicles?