Fuel Prices

[PeteC]

BANGKOK (Reuters) - Thais are to suffer another economic blow as global oil prices rose to a record above $80 a barrel and the post-coup government ruled out resurrecting fuel subsidies that were dumped as too expensive.

Motorists in Thailand are more exposed to global oil rises than many in Asia, after the country freed fuel prices at the pump to market rates by 2005, unlike countries such as China and India that maintain government-capped prices.

"Everything has become more expensive and sellers blame it on rising oil prices," said coffee vendor Atchara Jarinthong, who travels 50 km (30 miles) to and from work every day in a diesel truck.

Diesel prices at Bangkok pumps were raised by 0.40 baht a liter to 26.54 baht ($0.829) on Thursday, led by state-run market leader PTT PCL, as the price of Asian diesel reached a record around $91 a barrel this week.

Although rising oil prices have prompted bus firms to seek government permission to raise fares, Energy Minister Piyasvasti Amranand said the good old days of subsidized fuel, which cost the treasury $2.7 billion in 19 months, were over.

"There is no need to subsidize because at the end of the day, the party that will carry all the costs is still the consumer," Piyasvasti told reporters.

Between the government ending its subsidy on gasoline at the end of 2004 -- that for diesel ended in July 2005 -- and 2006, Thai oil product demand fell 3.7 percent, according to the International Energy Agency.

Demand is expected to stay flat at around 760,000 barrels per day over the next two years as biofuels and compressed natural gas propel more of the increasing number of vehicles on the roads, Piyasvasti said in Singapore in August.

Thailand is still raising funds to pay off the subsidy debt, incurred between January 2004 and July 2005, through surcharges on gasoline and diesel, making Thai fuel prices more expensive than they should be.

"What we should be doing now is to try to pay back 30 billion baht of the remaining debt within four months," Piyasvasti said.

U.S. crude held near $80 on Thursday after a record $80.18 on Wednesday. Prices have quadrupled since 2002 on worries about real and potential supply disruptions in producers, growing global demand and refining constraints.

Higher prices in Thailand, a highly agricultural country where farmers use a lot of diesel, means everything costs more and makes consumers more careful about spending.

"As diesel prices are rising very fast, we have to cut back on our rides to shopping malls, making our shopping list bigger each time before we go out," said coffee vendor Atchara.

($1=34.25 baht)

[Big Boy]

prscct wrote:

Diesel prices at Bangkok pumps were raised by 0.40 baht a liter to 26.54 baht

Hmmm just about 40 pence per litre .......... oh what a shame

I remember going to watch a football match, programme, oxo & a pasty at half time, bus fare there & and back and still having change from half a crown. I'm so glad the UK isn't as hard done by as Thailand.

[HHTel]

Sorry, Big Boy, you're way out of order. You are comparing with farang prices in countries whose average earnings are much much higher than here. As a farang, like you, my income is hugely different to a Thai's income so 20p as you put it is nothing. However, when fuel prices increase by more than 100% over the last few years, (greatly in excess of the percentage increase in Europe), that hits the Joe Public in Thailand a lot.
Try living on a household budget of around 6,000 baht a month and then try trivialising the fuel increases. --- I don't think so, Big Boy!!

[lomuamart]

BB,
The the thing is that the increase quoted below represents a 1 or 2% increase.
Assuming this will work it's way through the economy, as has every fuel price hike here over the past two years, everyone's going to paying more for everything, right through to food and water.
I can't put a figure on it, but I would suspect that there's been a 5-6% increase in basic cost of living here over the past 1-1.5 years.
If it goes on, I'm sure there will come a breaking point for every Thai, rural or otherwise.
Although a very different situation, but close to hand, is the example of Burma.
Politics over and out.

[PeteC]

When I left here after a 6 years stay in 1998, the diesel prices were (I'll write it in small print)

8.4 Baht per liter. The good old days I guess. Pete

[HHTel]

Exactly, Prscct. Hey BB, I think you need to apologise to the Thai population for your arogance.

[PeteC]

Exactly, Prscct. Hey BB, I think you need to apologise to the Thai population for your arogance.

Let's ease up a bit on this one. BB is a good guy and a good chunk of his income goes to supporting a Thai family here. He's just doing some tongue in cheek. Pete

[JD]

When I first got my truck some 3.5 years ago, it cost me between 650 - 700 Bht to fill the tank, latest price before this increase was 1750 Bht.

I buy a lot of produce in Thailand, this latest rise in diesel costs will result in the ever ready excuse of 'diesel go up, price go up'. It makes me laugh when I get charged an extra 100 Bht for something that has to come only 5 or 10 kilometers. These things normally settle back to previous levels after a few weeks or so. I probably put up with these increases a lot easier than the Thais do, but it's the Thais who will complain the most, who will return things to the normal, before anything that I could say that might influence that outcome.

[HHTel]

Okay, Pete. Reacted rather quickly. I too support my Thai family and have lived here for several years now. Just winds me up when I hear a farang trivialising problems as if we are the main consumers when it is in fact a big problem to the Thais.

Rant over.

[PeteC]

As the article said, the price is still jacked up paying for the 2004-05 government subsidies. If they can indeed pay off the remaining 30 billion baht owed from these increased costs over the next 4 months, prices will drop by several baht per liter across the board, just in time for the election. . Makes sense, a new government comes in and prices drop, swishing out the Thaksin era on a typhoon of fresh air. Almost as good as 100 Baht per vote. Pete

[redzonerocker]

Exactly, Prscct. Hey BB, I think you need to apologise to the Thai population for your arogance.

i do think it was a bit tongue in cheek, so a slight over reaction to say the least
one things for sure, things will always rise in price & the poorest will always suffer the biggest impact. nothing will ever change on that score.
the unstable state of the world at present doesn't help matters especially in the middle eastern countries.
what does wind me up is that even though the big oil companies report huge profits year in year out, the cost of fuel seems to continue to rise.

the whole economic system of thailand isn't very well structured. i do though admire the thais for the way they seem to survive under such financial restraints.

[Big Boy]

Okay, Pete. Reacted rather quickly. I too support my Thai family and have lived here for several years now. Just winds me up when I hear a farang trivialising problems as if we are the main consumers when it is in fact a big problem to the Thais.

Rant over.

Yes, what I said was tongue in cheek - apologies if it wound you up.

I'm not trying to trivialise the problem, but to make people realise that a problem such as the price of Diesel is worldwide. The Western world tends to suffer a lot more than Thailand for exactly the same product. As the OP says, this is cushioned in some countries. However, 0.4 Baht rise in Thailand, will probably end up being a 4 or 5 pence rise in the UK - I just wish it was only going to be a 0.4 Baht or 0.6 Pence rise here.

[chelsea]

When you think of it, my gross salary per week is about 27,000baht per week and pay the equivilant of 32baht per litre of petrol, where as you are paying nearly 27baht per litre.
I am not sure what the weekly grose wage of a normal Thai worker, but would not imagine it anywhere near 27,000baht per week.

So I can see how any type of petrol price increase is going to affect the Thai's big time, not only on a personal level, but with the price of goods, as in the end it will have to be passed on to the consumer for them to be able to continue trading.

It amazes me how the taxi operaters in HH can afford to continually offer trips to the airport for about 2000baht.

It would cost them at least 1000baht (there and back) for fuel and taking into consideration the time of the trip (at least 6hrs), there is not a lot of money left for wages when you look at what they charge.

It always amazes me the amount of people on this site that moan and complain about taxi prices, how would they feel if someone came into their business and wanted a service at cost price or less.

I hope people will think twice next time they are trying to screw the local taxis down to do a trip to the airport for less than 2000baht.
There is always the blue bus for the budget traveller if you so wish

[lomuamart]

We've had this sort of discussion about rising prices on the forum before. I seem to remember that I was going for a 5+% increase year on year and some disagreed.
I don't see any reason to change my mind. The reality isn't very scientific, but the two of us try to live on the same amount of money each month. That's flexible, but the overlying reason for trying to do so is that I've got to protect my business back home. And I havn't raised the budget here for 3 years.
So, the fuel price increases do really hurt my wife - and therefore me. I've lost count of the times she comes back home and complains of another price rise.
Correct me if I'm wrong, but I think the price of meat in the big markets is government controlled. That's why they write the price per kilo up on blackboards. Sure, you can find cheaper, but it's basically a standard price. Vegetables vary in cost, but it never seems that much - unless you're my wife who'll come home armed with asparagus because it was a good price that day. "But I still overspent!!!!!"
I never look at the electricity cost per unit, but I bet we're paying a lot more per month for the same "service" than we were doing two years ago.
I don't go out nearly as much as I used to, but we always seem to be scraping around at the end of the month to satisfy that thing called budget.
We don't have expensive tastes, but I bet our expenses have increased by 10%+ over the past two years. Unfortunately, my business back home will only realise me 3% increase a year. So, we're going backwards. It's not critical, but it's there.
As I've asked before (and I think I'm in the same position as most expats here), when will this country simply become too expensive to live in? I've been here 9.5 years and the end isn't in sight yet. But, if there's another large increase in financial consideration necessary to just get a visa extension to live here, well I don't know if I could qualify. And there will be another one somewhere down the road, I just don't know when.
So, when you retire here and have everything you want, allow another 50% on your personal expenditure over the next 10 years. That may be very pessamistic, but.....
I need a beer

[Procyon]

when will this country simply become too expensive to live in?

When costs start to get closer to the country you left and your expenses exceed your income.

Thailand has always wanted the "elite" falang, or simply just the rich, well keep wanting and there will be none left, the rich go to Monte Carlo!