Higher energy prices have driven up production costs by 20%, but manufacturers managed to increase goods prices by less than 10% as they struggle to maintain sales volume, according to the latest poll conducted by the Federation of Thai Industries (FTI).
Up to 38.8% of 165 company executives and members of the FTI in 45 industries said production costs have soared by 20% during the Russia-Ukraine war, followed by a 10% increase (30.3%) or a 30% rise (23%).
Only 7.9% told the pollster their costs skyrocketed by up to 40%.
However, 44.9% of respondents said they could increase their prices by less than 10% because a higher uptick will affect their sales, causing them to lose competitiveness, said Montri Mahaplerkpong, vice-chairman of the FTI.
Some 38.8% said they increased prices by 10-20%, while 12.7% hiked prices by 20-30%.
Only 3.6% said they could increase prices by more than 30%, according to the findings.
Most of the respondents (62.4%) agreed with the state measure to cut the diesel excise tax by five baht a litre and they want the authorities to extend the tax reduction period past its expiration date of July 20.
Respondents said this measure is needed as the global oil price surge showed no sign of abating.
Global oil prices began to increase late last year when many countries eased lockdown measures against the pandemic and tried to jump-start their economies.
Oil prices kept soaring after Russia invaded Ukraine on Feb 24, leading to the US and its allies imposing sanctions to punish Russia.
US President Joe Biden decided to ban the import of Russian oil, liquefied natural gas and coal to the US, while the EU will ban seaborne imports of Russian crude oil from Dec 5 and ban petroleum product imports from Feb 5, 2023.
Crude oil prices on Wednesday were recorded between US$99.1-102.1 per barrel, according to Brent and West Texas crude oil reference prices.
"Global oil prices are expected to stand between $120-140 per barrel in the second half of this year as the war will not end soon and Europe will use oil sanctions against Russia," said Mr Montri.
He was referring to the majority of respondents (44.3%) who believe the global oil price would fall into this range.