High fuel bills have taken their toll at all levels, as the number of people unemployed rose to 640,000 in March compared to 560,000 in the previous month, according to the National Statistics Office.

"A factor in the higher joblessness is the higher fuel oil prices which have pushed up manufacturing costs," a source at the office told the Kom Chad Leuk newspaper.

Of the total, 170,000 were new labourers who hit the job market in the month. By sector, 160,000 of the unemployed formerly worked in agriculture; while 110,000 had worked in the manufacturing sector.

"Remarkably, month on month, the number of jobless graduate students rose 20,000," the source told the daily newspaper.

As for educational levels, 150,000 had primary education degrees, 140,000 university degrees, 130,000 had finished grade 9, 120,000 had finished 12th grade, and 100,000 had no degrees or had not finished primary school.

While domestic octane-91 petrol prices have increased gradually since early this year, from Bt25.64 per litre on January 7 to Bt27.94 on April 28, diesel prices rose at a faster pace.

On January 7, diesel was at Bt23.89 per litre. On February 22, it was Bt24.69. Retail diesel prices were raised four times in March to Bt25.89 at the end of the month. The price increased three times in April to peak at Bt27.09.

Diesel is mostly used in the transport sector, prompting several transport service providers to pressure the government for permission to raise fares and freight rates.

The Federation of Freight Associations last month increased freight rates by 15-20 per cent.

The authorities stepped in last week to alleviate their troubles, hoping this would defer the burden on inflation and economic growth, by allowing oil companies to reduce contributions from diesel sales to the Oil Fund by Bt1 per litre. As a result on April 28 diesel prices dropped to Bt26.09 at all stations except PTT Plc's stations which sold the fuel at Bt25.69.

While there are worries about how long this measure will help, Reuters reported yesterday that Esso (Thailand), Bangchak Petroleum and Caltex (Thailand) would raise retail petrol and diesel prices today by 50 satang per litre.

The new diesel price at the three companies today be Bt27.59, while octane-91 petrol will priced Bt28.44 and octane-95 gasoline at Bt29.24.

Manager Online reported that the State Railway of Thailand (SRT) planned to raise express train fares by Bt70 per trip, effective May 10, as a result of the higher diesel prices. "Without the increase, SRT would have to shoulder an additional cost of Bt40 per kilometre," said SRT governor Chitsanti Thanasophon, who said the calculation was based on diesel costing Bt24 a litre, up from Bt14 a few years ago.

Businesses have so far refrained from commenting on the potential for layoffs, as companies start looking at ways to cut costs.

At a seminar last week, Pramon Sutheewong, chairman of the Board of Trade, said that manufacturing companies had tried to lower their production costs by buying new equipment that consumes less energy.

Meanwhile, business operators also asked the government to seriously consider options to improve the logistics network as only efficient networks will reduce transport costs.

Business Reporters

The Nation