Ministry to press firms to cut prices

Ministry to press firms to cut prices

Transport-related firms to lower charges

Shoppers pay for their purchases at a supermarket. Manufacturers of consumer goods have been asked to reduce their prices in accordance with declining costs, especially for fuel. (Photo by Thanarak Khunton)
Shoppers pay for their purchases at a supermarket. Manufacturers of consumer goods have been asked to reduce their prices in accordance with declining costs, especially for fuel. (Photo by Thanarak Khunton)

The Commerce Ministry will call a meeting soon with consumer product manufacturers to ask them to cut their prices as oil and transport costs continue to fall.

Somsak Kiatchailak, deputy director–general of the Internal Trade Department, said the authorities were studying the price structure of consumer goods after transport-related operators had agreed to cut their charges by 5-10% from early this year.

The Internal Trade Department last year convinced manufacturers of certain products such as construction materials, chemical fertilisers, pesticides, car tyres and steel to cut prices by 3-20%.

Mr Somsak said tyre prices in particular are likely to be price cut in light of lower raw material costs since global rubber prices have dropped significantly while the price of synthetic rubber has also fallen with the decline in global oil prices.

However, he added the authorities will also take diesel prices and the foreign exchange rate into account.

Diesel prices are now quoted at 20.59 baht, down from the 29.99 baht average in 2015, while the baht has dropped to 36 against the US dollar from last year's average of 32 baht to the greenback.

Mr Somsak insists the prices of overall consumer products should stay unchanged this year given the relatively low oil prices.

He said the authorities still need to monitor processed foods whose prices remain relatively high despite the lower prices of raw materials such as meat and vegetables.

Most food outlets face high expenses such as rent. 

The Commerce Ministry last week agreed to maintain price controls on 41 items but warns it will review its list if their production cost structure changes.

The ministry is currently supervising 225 items. These are essential products and services including sensitive products that need daily monitoring such as packed rice, cooking oil, eggs, pork and powdered milk.

The price control list covers essential items for daily use such as food, consumer products, farm-related products (fertilisers, pesticides, animal feed, tractors and rice harvesters), construction materials, paper, petroleum and medicines.

Listed foods include garlic, paddy, milled rice, corn, eggs, cassava, wheat flour, yoghurt, powdered/fresh milk, sugar, vegetable/animal oil and pork.

Consumer products include detergents, sanitary napkins and toilet paper.

Businesses making or selling products on the list are required to inform the authorities of their production costs and must seek approval before any price increase.

In a move to help alleviate consumers' burdens, the ministry is committed to expanding its low-cost food scheme to cover 10,000 items this year, up from the present 3,900.

The scheme will be aimed mainly at locations with many low-income earners such as factory sites.

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