To date, 60 companies with goods in 23 product categories have sought the ministry's permission to increase their retail prices. They include makers of shampoo, paper, chemical fertiliser, soap, condensed milk, and electrical wiring.

A ministry source said yesterday that alkaline batteries would be the first product given approval for a price rise because manufacturers sought the Internal Trade Department's permission three years ago.

"The ministry will consider allowing a few products to increase their retail prices per month so as to reduce the impact on consumers while decreasing the rising cost burden on manufacturers," the source said. "After having frozen prices for a long time to help ease the burden on consumers, we have to allow some products to increase their prices because manufacturers are also suffering from the escalating price of oil."

The Commerce Ministry has controlled the prices of essential goods for two years to contain the inflation rate. The rising oil price has put pressure on the inflation rate. Fears are that if inflation gets out of control, it may affect economic stability.

Caretaker Deputy Commerce Minister Preecha Laohapongchana said the price increases should not affect the country's inflation rate. The ministry has projected an inflation rate of 4 per cent or 4.5 per cent this year, although in the first half of the year it was 5.9 per cent.

The Bank of Thailand's Governor MR Pridiyathorn Devakula said yesterday that pressures on inflation would ease in the second half of the year because there was a substantial price adjustment period after diesel-fuel prices were floated late last year.

The ministry has drawn up measures to reduce the burden of higher prices on consumers. For instance, some goods for which prices will rise will be sold at cheaper prices at weekend markets arranged by the ministry in conjunction with manufacturers. The markets are being held once a month throughout the country between June and September.

"We have to protect consumers from trade-practice cheating," Preecha said.

Earlier, some consumer companies threatened to sue the Commerce Ministry for not permitting them to raise their retail prices to help them cope with rising production costs.

Meanwhile, Thailand's Consumer Confidence Index dropped to 80 points in June, the lowest level in 50 months. According to those who calculate it, it seems certain to keep falling for the rest of the year because of the worsening political outlook and rising oil prices.

Petchanet Pratruangkrai

The Nation