John Aglionby @ Bangkok

If you have urgent business in the near future at a Thai government office, I recommend that you go in the morning. Not because the early shift is any less corrupt or more efficient; it's just that it's much cooler than in the afternoon. For, paradoxically, as the shadows start to lengthen outside, the temperatures inside start to rise until the situation becomes stickily uncomfortable.

This is not the result of an alarming quirk of climate change but of a prime ministerial directive. For Thaksin Shinawatra has ordered that the air conditioning be switched off early as part of his nationwide campaign to save energy in the face of surging global oil prices. Thailand, with no major oil reserves, has been particularly hard-hit by the recent rise.

Government employees are not the only ones enduring the pain. Some police officers have been transferred from motorbikes to pedal power, all petrol stations except those on motorways have to close between midnight and 5am, and roadside neon signs have to be switched off at 10pm. From this week, the vast majority of shops will have to curtail their opening hours.

The energy savings are already taking a toll. Centuries-old records at the national archive have reportedly been damaged because of the fluctuating temperatures: staff say fungi and rising humidity are wreaking havoc due to the air conditioning being switched off from 4pm on Friday until Monday morning. Retailers are predicting tens of thousands of redundancies as a result of the restrictions. Hundreds of thousands more people will probably have to take a pay cut due to working shorter hours and shops losing up to 20% of their revenue. Hoteliers are panicking that the measures will turn tourists away.

The prime minister is facing criticism from numerous analysts. They argue that most of these repercussions could be avoided if Mr Thaksin simply shelved the billions of pounds of fuel subsidies which the government currently budgets for. Instead, they argue, he should allow petrol prices to float freely, driven by market forces, because the result of the subsidies is that the main beneficiaries are people who can afford to pay more - namely car-owners. Electricity prices could also be hiked, analysts suggest, as this would in all likelihood cut energy consumption.

Mr Thaksin is standing firm in the face of this growing opposition. He is driven not by bloody-mindedness but cool, air-conditioned political calculation. The premier has to call a general election within six months and he fears that shelving fuel subsidies and raising electricity prices would be political suicide. He has built his premiership on a raft of populist policies targeted more at the rural masses than the affluent urbanites and believes this latest crisis - coming in the wake of Sars and bird flu in the past 18 months - should be handled in the same way.

This means there are always going to be victims: in his war on drugs last year, thousands were killed and no one was brought to justice. But having tens of thousands face dismissal because of rising oil prices is a better outcome than millions of grumbling farmers.

According to economists, however, such a strategy is not without its risks. They fear that the failure to swallow a bitter pill now could result in the nation being forced to endure much more painful medicine later, once the force of accumulating economic and social ills becomes so strong it can no longer be contained by sugar-coated short-term populism.

Whether this transpires and Thailand faces economic meltdown as it did in 1997 remains debatable. In the meantime, just remember to fill up your tank before midnight.