Operators fret over rising diesel price

Operators fret over rising diesel price

Price in some areas now exceeds 30 baht

Suphan: No effect yet on production costs
Suphan: No effect yet on production costs

Business operators have expressed concern over the rising retail diesel price in some provincial areas, saying they will monitor it over the next few weeks to determine if it will affect transport costs.

Several upcountry motorists said the diesel price has risen sharply over the past few weeks, now above 30 baht per litre in some provinces, while the price in Bangkok and Greater Bangkok remains at 29.79 baht, up 2.3 baht from 27.49 baht on April 21.

Suphan Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said material, logistics and production costs have yet to be affected by the sharp increase in diesel prices, as global oil prices are still increasing slowly.

The FTI is monitoring the situation because many business operators are concerned the higher price may soon affect overall manufacturing levels.

"Dubai crude oil is now US$75-80 per barrel, which is acceptable for the business sector to manage costs, but once it exceeds $85, business operators will be much more worried," said Mr Suphan.

He said the FTI will order its Institute of Industrial Energy to work on the matter while keeping an eye on the possibility of higher transport costs being passed onto consumers.

Vice-chairman Chaiwat Kovavisarach said global oil prices are expected to increase further because a shale oil pipeline in the US is now running at full capacity.

International political issues between oil producers and world leaders are further expected to push up the price.

"Some 60-65% of the retail oil price in the country is the actual price, but it has to include excise tax, value-added tax and a subsidy to the State Oil-Fund, so there are many dimensions pressuring the local price," said Mr Chaiwat, also president and chief executive of Bangchak Corporation Plc.

The FTI and Science and Technology Ministry have completed talks to set up four new joint committees for cooperation on projects to upgrade the country's industrial sector, in line with the Industry 4.0 initiative.

Mr Chaiwat said business operators have also called for the government to improve the industrial sector through higher technology. The four committees will propose their development plans in the next two weeks.

The plans are focused on four areas -- technology and innovation, a Stem (science, technology, engineering and mathematics) academy, an industry innovation centre and future industry infrastructure.

The FTI will seek 5,000 startups from 45 industrial sectors to participate in the programme. Mr Suphan said the FTI and the ministry plan to launch an innovation training programme to further develop related human resources.

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