Inflation could surpass target

OIL PRICES

Inflation could surpass target

The Commerce Ministry's Internal Trade Department is showing concerns on the continued spikes in global oil prices, fearing it could push Thailand's goods prices and inflations above the target range.

Yanyong Phuangrach, director-general of the department, said the ministry's inflation target of 3.0-3.5 per cent this year is based on the Dubai crude oil price of US$80-$85 a barrel.

"If oil price soars to $120 a barrel in the next six months as anticipated by the Opec (Organisation of Petroleum Exporting Countries), this is beyond our expectation," he said.

He noted that in this situation, the ministry will closely monitor goods prices to minimise the impacts on consumers. It would look into cost controlling measures at factories as well as retail prices of goods. But what concerns him is the prices of food products - vegetable oil and others - which tend to rise further.

Crude oil prices soared to $100 a barrel Wednesday for the first time, buoyed by supply concerns tied to violence in Nigeria and worries that US stocks will register their seventh weekly decline in a row.

Light, sweet crude for February delivery rose $4.02 to $100 a barrel on the New York Mercantile Exchange before slipping back to settle at a record close of $99.62, up $3.64 from the previous day.

With oil having briefly touched the once unfathomable price of $100 a barrel, consumers can expect the cost of filling their gas tanks and the increasing price of most everything.