While eager consumers yesterday lined up for promotions from financial institutions at the Money Expo 2006 at the Queen Sirikit National Convention Centre, business leaders were calling for government help at a riverside hotel.

Former deputy prime minister and finance minister Virabongsa Ramangkula used the Asia Petrochemical Industry conference at the Shangri-La Hotel to warn the Kingdom's sparring factions to follow HM the King's advice and work together to solve the political crisis.

If they do not act swiftly the economy will be ruined, he warned.

A caretaker government is incapable of effective economic management, he said.

Virabongsa, a board member of Thai Petrochemical Industry Plc, also warned that high oil prices were not temporary as they were the result of increased demand not speculation.

With the economies of China and India expanding, oil prices are unlikely to fall, he said.

Virabongsa also said he opposed price controls because they distorted the economy. However, the next elected government would not be able to strictly control energy consumption because this would damage its popularity, he added.

The president of the Federation of Thai Industries, Santi Vilassakdanont, told the conference that consumers' purchasing power was declining. He cited falling sales of electrical appliances and luxury goods as evidence. Sales of consumer products have risen 5 to 6 per cent because they are necessities, he said.

Competition in the consumer-product sector is fierce, so manufacturers are unable to raise prices, he said.

However, he said the federation had told manufacturers to consider raising prices to reflect rising oil prices and interest rates as well as the strengthening baht.

The federation will gather data and ask for government assistance soon, Santi said.

Meanwhile Surat Thani Chamber of Commerce chairman Jumphol Laikosit said the economy of the southern province, especially its tourism and export industries, had been damaged by rising oil prices, the stronger baht and political uncertainty.

The rising cost of transporting construction materials is also hurting the real-estate industry, he said.

Provincial and national chambers of commerce will ask the government to carefully manage foreign-exchange and interest rates, he said.