The nation ( 30 Oct 2007)
Thailand's economic forecast will be revised on November 23, when the recent oil price hikes as well as global economic conditions will be taken into account, a Finance Ministry official said.
Ekniti Nitithanprapas, director of the Fiscal Policy Office's Macroeconomic Analysis Group, said that Thailand's gross domestic product will be slashed 0.2 percentage point for every US$1 increase in the Dubai crude oil price. Meanwhile, the $1 increase will also push up inflation by 0.3 percentage point, he said.
Still, he favours the idea of letting retail oil prices move along market mechanism, but the government may need to help relieve the burden of low-income earners and the most affected sectors.
The office's current economic growth forecast is 3.8 to 4.3 per cent. Oil prices yesterday rose above $93 a barrel after Petroleos Mexicanos said it was suspending about a fifth of its oil production due to a storm. Its plan to shut down as much as 600,000 barrels of daily crude production came amid political tensions in the Middle East, a weak US dollar and a tight supply outlook that has already pushed crude oil to record prices.
Light, sweet crude for December delivery rose as much as $1.34 to $93.20 a barrel, a new intra-day record, in early afternoon Asian electronic trading on the New York Mercantile Exchange. It later slipped back to $92.84 a barrel. That was still up 98 cents from Friday's record close of $91.86 a barrel. The previous trading high was $92.22 a barrel, set on Friday. Dubai crude oil also gained $2.41 to $82.85.
Thai oil retailers yesterday did not announce any plan to raise domestic prices. Despite the latest movement, Energy Minister Piyasvasti Amranand insisted that the Oil Fund would not reduce obligatory contributions from oil retailers to delay a domestic price hike. He insisted that the Oil Fund should be exploited only in emergencies such as wars. He also noted that delaying a hike today means higher collection tomorrow to cover the expenses as well as interest burden. For every litre of oil sold, the Oil Fund receives Bt1.50 per litre from diesel; Bt4 from octane-95 petrol; Bt3.70 from octane-91 petrol; 70 satang from gasohol 95, and 20 satang from gasohol 91. The ministry earlier said once all the Bt82-billion debt is cleared, the contributions would be split in three parts: one part will be used to finance rail construction, another would be used to cut retail oil prices, and the third part will be banked. While foreseeing that global oil prices will exceed $100 a barrel, he said that it would not stay there permanently. Meanwhile, the Organisation of Petroleum Exporting Countries in November could increase the output and that would ease market jitters. While saying that the strong baht has softened the impact to some extent, he also suggested that Thais use alternative fuels to reduce their higher burden. Product manufacturers are pressuring the Commerce Ministry for permission to raise their prices. The ministry last week approved a Bt3 per kg increase in the ex-farm pork price. Meanwhile, the Energy Ministry is set to reduce subsidies on cooking gas prices around mid-December. With rising pork and cooking gas prices, food shops are preparing to charge their customers Bt2 to Bt3 more per dish. "If possible, I won't raise the dish price but now I think I have no other choice," a Lop Buri food shop owner, nicknamed Noi, said. She said the cost was rising sharply and her small business would not survive if 'rice with toppings' at her shop were not sold at a higher price. Noi said she used to make between Bt500 and Bt700 profit per day. "But the rising cost has left me with only a few hundred baht of profit," she said.
No comments:
Post a Comment