The Internal Trade Department will discuss with the Energy Ministry today a proposed increase in the cooking gas price of 10-15 satang per kilogram.

Internal Trade Department director-general Siripol Yodmuangcharoen said the planned fact-finding discussion came on the heels of gas-compression firms requesting permission to raise their cooking-gas prices, despite their insistence earlier the prices would be maintained. But the fear is that a price hike will be more fuel for the highly combustible fires of inflation.

"There are rumours some operators informed small traders that the cooking gas price would be raised in November due to higher costs," he said.

Chitsanupong Rungrojngamcharoen, chairman of the cooking gas distributors' association, admitted some plants had told gas distributors of the increase, slated to take effect on Friday. He insisted that despite the increase, gas prices would remain under the control price of Bt15.07 per kg.

"We will not raise the price if gas distributors are entitled to the special diesel price offered to the transport sector," he said.

Earlier, the government approved the sale of cheap diesel to transport companies, to help them delay increasing their fees and fares and keep inflation in check.

In April, due to the spike in oil prices, inflation returned to 6 per cent, the highest in five months.

While Bank of Thailand Governor MR Pridiyathorn Sonakul said he was surprised at the high inflation rate, he said the target of 3.5-4.5 per cent remained in tact. Meanwhile, Deputy Prime Minister and Commerce Minister Somkid Jatusripitak insisted the 6 per cent rate was not so high and that it was merely based on current oil prices.

"We will maintain the inflation target rate. However, everything depends on world oil prices," he said.

The pressures of high inflation will affect East Asian economies this year, according to the International Monetary Fund (IMF).

The IMF forecasts economic growth of 7 per cent in the Asia-Pacific region this year - the same as in 2005 - supported by well-established economic expansion in Japan and Australia, and solid growth in most of emerging Asia.

The IMF said in its May 2006 Asia-Pacific Regional Economic Outlook that high oil prices, tightening global financial conditions, global current-account imbalances and a possible outbreak of an Avian flu pandemic could slow growth.

"This year should be another good one for Asia," said Wanda Tseng, deputy director of the IMF's Asia department. "This favourable outlook derives mainly from the momentum that Asia has gathered in recent quarters."

The IMF said in its report that there were three key challenges for macroeconomic policy makers: dealing with inflationary pressures, strengthening fiscal positions and invigorating domestic demand.

"In emerging Asia [excluding China], invigorating demand requires reviving investment. Investment fell by nearly 10 per cent of GDP in the aftermath of the 1997 financial crisis and it has not recovered since," it said. "With progress in the banking and financial sector restructuring in recent years, weakness in these sectors no longer seems to be a constraint on investment."

Crude futures yesterday rose to test the US$74 (Bt2,790) a barrel level. Rising with it is the gold price. Domestically, the price per 15-gram gold bar hit Bt11,600 after gold in Hong Kong closed markedly higher at $654.50-$655.00 an ounce, compared with Friday's finish of $638.30-$638.80.