Dow Chemical Company plans to raise product prices across the board by by at least 20 per cent beginning June 1, in a move that will impact prices of most consumer goods from plastic bags to food and detergents.

Dow, one of the largest chemical companies in the world, attributed the sweeping price increases to the extraordinary rise in energy and related raw material costs.

Midland, Michigan-based Dow said while the prices of all its products will go up, the extent to which prices are raised will depend on on the product's exposure to rising energy, feedstock and transportation costs. Dow said it will also review all terms to customers.

It is likely that the company would increases prices of specialty chemicals, which perform such functions as making plastics lighter and stronger, fabrics more durable and paints more fade-resistant, most, analysts said.

Dow, which uses hydrocarbon-based products and natural gas as raw materials for its chemicals and is a heavy user of energy to power its manufacturing plants, said its energy and feedstock cost is expected to top $32 billion this year against $8 billion in 2002.

''Our first quarter feedstock and energy bill leapt a staggering 42 per cent year-over-year, and that trajectory has continued, with the cost of oil and natural gas climbing ever higher,'' Andrew N. Liveris, Dow chairman and CEO said. ''The new level of hydrocarbons and energy costs is putting a strain on the entire value chain and is forcing difficult discussions with customers about resetting the value proposition for our products,'' he added.

Dow, like other chemical companies, has been raising product prices to pass on higher raw-material costs to customers, these have been mostly confined to one product or one region. The company's decision to increase prices for all its products world-wide is nearly unprecedented.

''In addition to these price increases,'' Liveris said, ''the company is continuing its aggressive cost-control plan internally and is accelerating its existing top-down competitiveness review for all of its businesses and manufacturing facilities in the light of these new feedstock and energy prices.''

Liveres said Dow is being forced to have "difficult discussions with customers," but added that the increases will not come as a total shock to clients.

Germany's BASF, the world's largest chemicals manufacturer, however said it is shying off a price hike for fear of the market.

Another major chemicals manufacturer, DuPont Co, which also plans to raise prices, said it didn't expect its increases to be as steep as Dow's. Analysts, however, expect chemical companies across the spectrum to announce major price increases.

With annual sales of $54 billion, customers in about 160 countries, and about 46,000 employees worldwide, Dow is a diversified chemical company. Dow offers a broad range of products from fresh water, food and pharmaceuticals to paints, packaging and personal care products.

Dow's customers include consumer-product giants like Procter & Gamble and Unilever, eye-care products manufacturer Alcon Laboratories Inc and major manufacturers of auto and household products.

Meanwhile, Dow reported a fall in US demand for its products along with the slowing of the economy. While this could help damp inflationary pressures, it would hurt manufacturers who are unable to pass on Dow's price increases to their customers.

But that would pressure manufacturers, especially in the auto and housing-related sectors, shaving their profit margins at a time when they, too, are being squeezed by high energy costs and weak consumer demand.

For the first quarter of the year, Dow reported a two per cent drop in sales volumes in North America, although revenues rose 14 per cent from a year earlier. Net income in the quarter fell 3.3  per cent to $941 million.

While prices of crude oil are ruling above $125 a barrel, natural gas prices in the US have risen more than 50 per cent over the past year to about $12 per million British thermal unit.

The cost of polyethylene - a commodity chemical used in a variety of consumer products, such as plastic shopping bags - has climbed from roughly 30 cents a pound five years ago to about 80 cents a pound now.

Rising raw materials cost has forced Dow to sell 50 per cent of its commodity-plastics unit to Kuwait-based Petrochemical Industries Co. for $9.5 billion in December, in a transaction that would provide the world's largest plastics business with cheaper raw materials.