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Published on September 22, 2007

The call followed an announcement by state gas and oil conglomerate PTT that it would raise the prices of diesel and 91- and 95-octane petrol by Bt0.40 per litre today.

Every Bt1 increase in the price of diesel forces operators to raise their freight rates by Bt0.25 per kilometre, said Apichart Phrairungruang, adviser to the Land Transport Federation of Thailand representing operators of 400,000 trucks.

The current freight rates are based on a diesel price of Bt22.98, he told a press conference yesterday. "Diesel prices have risen by over Bt5 per litre from last year, but we have raised the freight by a few satang at our clients' request," he said. "We want to meet the energy minister to discuss this."

The federation also urged the government to fix the price of NGV at Bt8.50 per kilogram for three to five years.

On top of higher fuel prices, the federation's truck-operators suffer from competition from non-member operators who run overloaded trucks by dint of bribes, secretary-general Thongyu Khongkant said.

"They pay Bt2,500-Bt5,000 per truck per month, and the excess weight carried each year can be about 300,000 tonnes," he said.

Oil-retailers have to contribute Bt1.50 to the Oil Fund for every litre of diesel sold. The Energy Ministry said earlier that the contributions would be continued even after the fund repaid all its debt at the end of this year to finance railway development nationwide.

On Thursday inter-province bus-operators also asked to hike fares by Bt0.08 per kilometre, citing the higher oil prices.

Energy Minister Piyasvasti Amranand countered yesterday that despite the latest increase diesel prices were still lower than last year, when PTT's diesel was Bt27.94 per litre while other retailers charged Bt28.34.

"Despite volatility and higher retail prices, bus-operators should not raise fares now or they will hurt the public further," he said.

Domestic fuel prices are being raised after global oil prices shot up due to higher demand and lower reserves in the United States. The US oil reserve of 319,000 million barrels is 13 million barrels less than last year.

A depression in the Atlantic Ocean could develop into a tropical storm that could hit oil and gas fields in the Gulf of Mexico when several refineries are already closed for maintenance.

"We have tried to delay the retail-price increase, but under the current conditions, we need to raise the retail prices of both petrol and diesel by 40 satang," said PTT senior executive vice president Chaiwat Chooritti.

The price of 95-octane petrol will rise to Bt29.99 per litre, 91-octane to Bt29.19 and diesel to Bt27.34.

"Oil prices keep fluctuating, and this could raise oil prices," Chaiwat added.

On Friday Dubai crude oil price rose to US$75 (Bt2,568) per barrel, up $1.40 from the previous day. Finished 95-octane petrol also rose by $2.98 to $85.40 a barrel, while diesel was stable at $92 a barrel.

Watcharapong Thongrung

 The Nation