Somkid, also commerce minister, dispensed his views to more than 80 manufacturers during a meeting yesterday. The Commerce Ministry wants them to maintain their prices to support the government's policy of curbing inflation.

Government spending will be delayed in the next budget year, which starts October 1, due to the lack of a sitting government.

"Government spending will be an important engine driving the economy and the private sector needs to see more of this," he said. "However, the delay in government disbursement will slow the private sector's growth as well. We have to shortcut the budget disbursement procedure to facilitate the government's projects. If the government suspends investment, the private sector will face difficulty."

However, Somkid said the fiscal 2007 budget would be approved by the end of this year after the scheduled October 15 election.

To help curb inflation, major consumer goods manufacturers such as Saha Group, Unilever and Colgate-Palmolive yesterday agreed to maintain their prices as long as they can despite rising production costs.

Prasert Bunsumpun, president of PTT Plc, said the oil price would continue upward for the next two years due to rising world consumption. After that, the oil price will be US$50-$70 (Bt1,895-Bt2,653) per barrel thanks to people turning more to alternative energy.

He suggested that manufacturers calculate their production costs based on a diesel price of Bt30 per litre instead of Bt27-Bt28. The figure will help reduce manufacturers' losses from escalating oil prices.

Boonsithi Chokwatana, chairman of Saha Group, said rising oil prices had mainly increased packaging and transportation costs.

"The group has tried to absorb the rising costs as much as we can instead of passing the burden to consumers," he said.

As a major manufacturer of consumer goods, Saha Group's commitment has prompted other companies such as Unilever and Colgate-Palmolive to maintain the prices of their goods too.

Meanwhile, the Internal Trade Department has ordered cuts to the local price of steel rods by an average of Bt300 per tonne, due to lower prices on the world market.

Sawasdi Horrungruang, chairman of Millennium Steel PLC, said steel prices were now falling very aggressively according to waning world demand. The steel rod price has fallen to $320 per tonne from $370 in the past week.

Petchanet Pratruangkrai

The Nation