High oil prices squeeze heavy industry as costs jump up to 50%, FTI warns of packaging shortages
FTI chair Kriengkrai Thiennukul urges the government to use the Oil Fuel Fund to help stabilise energy costs for industry, warning that heavy sectors face energy costs of 35-50% and petrochemical disruptions could trigger shortages of plastic packaging.
Thailand’s heavy industries are coming under renewed pressure from high oil prices, with production costs rising sharply and supply-chain strains raising the risk of shortages in plastic bags and packaging materials, according to the Federation of Thai Industries (FTI).
Kriengkrai Thiennukul, chairman of the FTI, said the federation has urged the government to consider using the Oil Fuel Fund mechanism to provide additional energy-price support to the industrial sector. He said this would help stabilise prices, reduce incentives for panic buying at petrol stations, and ease manufacturing costs.
He warned that without urgent action the impact could cascade through the wider economy, as energy accounts for a large share of costs in industry—especially heavy sectors such as cement, steel, aluminium, glass, pulp and paper, and petrochemicals, where energy can make up 35-50% of total costs. For general industries, he said the average share is around 12-20%.
As energy prices rise, he said, the burden ultimately feeds into end-product prices and falls on consumers. The current tight energy environment, he added, is becoming a clear accelerator of cost-push inflation in Thailand.
If the government cannot manage the energy-price balance in time, Kriengkrai said consumers could soon face both higher prices and product shortages, with broad impacts across the economy.
Kriengkrai said that beyond the oil shock, the supply chain for key raw materials is also tightening. Some petrochemical operations in Rayong have had to suspend production temporarily due to a shortage of naphtha, which is imported from the Middle East.
He said this could trigger a knock-on effect, particularly for plastic resin pellets, a key input for the packaging industry. He said prices have already risen by around 40%, raising the risk of insufficient packaging for consumer goods and for agricultural exports.
He added that industries such as fertiliser and construction materials including aluminium are also beginning to face shortages.
Kriengkrai called on the Commerce Ministry and relevant agencies to urgently seek alternative sources of raw materials and step in to oversee pricing, to ease pressure on all sectors during this period of abnormal market conditions.
“We are facing the risk of shortages in plastic bags and packaging, which would directly affect consumer goods and export industries such as frozen food, where orders have increased three to four times during the war—but packaging may not be available to support that demand,” he said.
