GRAVEL WARNING
The Commerce Ministry has ordered asphalt makers to cut prices to reflect actual costs or potentially submit to price controls.
The government has vowed to closely monitor prices of construction materials after contractors complained about asphalt costs nearly doubling year-on-year.
Deputy Commerce Minister Sontirat Sontijirawong said the ministry has ordered asphalt makers to cut prices to reflect actual costs this week. If they refuse, the government may be forced to put asphalt on the price control list, he said.
The price control list covers essential items for daily use such as food, consumer goods, farm-related products, paper, petroleum and medicine. Consumer goods include detergent, sanitary napkins and toilet paper.
Businesses making or selling listed products are required to inform the authorities of their production costs and seek approval before any price increases.
Last month contractors filed a petition with Deputy Prime Minister Somkid Jatusripitak complaining they have been affected by higher asphalt prices, which rose to 20,223 baht a tonne in February from 10,593 baht a tonne in the same month last year.
Higher asphalt prices affect their construction costs, particularly for projects that have already signed contracts or are under construction, said the contractors.
The rise in asphalt prices from August last year to February this year was not symmetrical with the oil price gain, as asphalt prices have risen nearly 100% but diesel prices rose only 20%, said the contractors.
Mr Sontirat said the ministry recently called a meeting with asphalt makers PTT, Shell and Chevron. He said they defended the price hike on grounds of strong demand and low supply caused by two giant plants suspending production.