Petrol prices continue to erode consumers’ pocket

The ministries of Industry and Trade and Finance, on the afternoon of March 1, allowed fuel enterprises to increase the domestic retail prices of gasoline. Accordingly, E5 RON92 gasoline rose by VND547 per liter to a maximum price of VND26,077 per liter; RON95 gasoline price surged by VND554 per liter to a maximum of VND26,834 per liter. It is the sixth consecutive increase and the fifth increase in a row in 2022. Along with an increase in gas prices, the fact that gasoline prices continued to climb has put pressure on food products, consumer services, and transport.
Petrol prices continue to erode consumers’ pocket ảnh 1 Petrol prices have climbed for six consecutive times. (Photo: SGGP)

Controlling commodity prices

According to the ministries of Industry and Trade and Finance, in the past ten days, the global petroleum market continued to develop complicatedly. Especially, due to the conflict between Russia and Ukraine, the petroleum supply was affected while gasoline demand increased. The average price of petroleum products in the past week reached US$111-US$114 per barrel. Due to the continuously increasing petrol prices, from the beginning of the year to now, the ministries have allowed fuel enterprises to use the Fuel Price Stabilization Fund heavily to curb domestic gasoline price hikes. Meanwhile, according to the updated report of the Ministry of Finance, the Fuel Price Stabilization Fund has fallen sharply compared to the end of 2020. By December 31, 2021, the total balance of this fund was more than VND898.58 trillion.

According to Associate Professor- Dr. Dinh Trong Thinh of the Academy of Finance, the last six consecutive increases in petrol prices have had a direct impact on all types of goods and services with input costs of petrol and oil, including transport, aviation, fishing, agricultural production, and tourism, directly affecting the daily life and travel needs of people, as well as the prices of essential goods, such as food and foodstuff. According to the statistics of the General Statistics Office of Vietnam, among the factors that caused the consumer price index (CPI) in the first two months of this year to increase by 1.68 percent, the gasoline price hike was one of the main reasons.

For gasoline prices not to affect too strongly the domestic market prices of goods and services, on March 1, the Ministry of Industry and Trade issued Official Dispatch No.960 asking the General Department of Market Surveillance and the departments of Market Surveillance of provinces and cities to strengthen market inspection and supervision. The dispatch signed by Minister Nguyen Hong Dien asked the Director of the General Department of Market Surveillance to direct the entire force to strengthen supervision and management in the area, implement professional measures, develop options and plans, and coordinate with relevant units to closely inspect and supervise organizations and individuals who take advantage of the market with fluctuations in supply and demand, commodity prices due to the pandemic, or unusual changes to gain illicit profits.

Transport services start to adjust prices

According to the Hanoi Taxi Association, the fact that gasoline prices escalated while the taxi fares could not be adjusted immediately makes many taxi drivers want to stop working because their income has decreased sharply. Taxi service enterprises have been considering increasing the fares appropriately because gasoline prices have climbed many times, but the taxi fares have not been adjusted. Similarly, a representative of the Vietnam Automobile Transportation Association also said that many passenger transport enterprises have not recovered their operations after the pandemic yet, due to the small number of passengers. Currently, the number of active vehicles accounts for less than 50 percent of the total number of vehicles, especially enterprises with routes to mountainous provinces. Amid the context that revenue is not enough to cover costs and gasoline prices increase, all passenger transport businesses complain that the more they operate, the more they lose. However, if they stop operations, there will be no cash flow. Shortly, passenger transport businesses will have to consider increasing their fares.

However, if the number of customers remains as low as currently, increasing fares will not save transport businesses. For freight companies, according to preliminary calculations, with this increase in gasoline prices, enterprises need to adjust their freight rates by 10 percent, resulting in road transport costs being mounted by up to 5 percent. Therefore, freight enterprises have asked the Ministry of Industry and Trade, relevant ministries, and sectors to soon consider the structure of taxes and fees and have more flexible tools to control gasoline prices, reducing difficulties for people and transport enterprises.

Great pressure on consumers

It was recorded that on March 1, the price of ready-made and vegetarian food continued to inch up. Le Phuong, living in Nguyen Anh Thu Street in Hoc Mon District in Ho Chi Minh City, said that from March 1, the gas price skyrocketed by VND42,000 per 12-kg cylinder, and the gasoline prices adjusted to nearly VND27,000 per liter, causing great pressure on people selling ready-made and processed foods. Customers were displeased if the seller increased the price of a bowl of vermicelli from VND25,000 to VND28,000. But, if the seller did not increase the selling price, the seller must suffer loss because fuel prices escalated sharply, she said.

Petrol prices continue to erode consumers’ pocket ảnh 2 A customer buys vegetables at a traditional market in HCMC. (Photo: SGGP)
Nguyen Van Quyet, living in Nguyen Thi Dang Street in District 12, said that in the past few days, shopping was like “having money stolen". Fresh food, vegetables, and cooking oil all inched up making consumers exhausted. He added, “it cost VND80,000 to fill up the fuel tank a few weeks ago, but now it costs VND110,000-VND120,000. A box of fresh milk for children was only about VND680,000, but now it has risen by VND30,000. The bowl of beef noodle soup used to cost VND35,000. Now, it costs VND40,000, but with less vermicelli and less meat." Not only the food items but the prices of hair and beauty care services also surged. At a hair salon located in an alley on Le Van Khuong Street in District 12, hair shampoo service increased by VND10,000 to VND35,000 per person; hair cutting and dyeing (except blackening) rose by VND50,000 to VND350,000 per person. Manicure service also edged up by about VND10,000 per person due to slippage. According to Phuong Thi Lan Anh, the owner of a beauty salon in Duong Thi Muoi Street in District 12, the price hike following the gasoline price happened after the Lunar New Year and increased in the past week. In the context of economic difficulties and tighter spending as currently, the increase in prices of food and services makes people's life more difficult. Some supermarkets in HCMC have received a proposal to increase retail prices from suppliers, but they are still negotiating to keep good prices for consumers. Ms. Nguyen Thi Bich Van, Communications Director of Central Retail Group, which owns the Big C supermarket system in Vietnam, affirmed that there had not been any change in the selling prices of products at supermarkets.

Mr. Truong Van Ba, Director of HCMC Department of Market Surveillance, said that the department has been working with inter-sectoral forces to inspect petrol stations and medical equipment stores with signs of violations to stabilize the consumer market, avoiding speculation to increase the selling prices.

North Central Coast: Oil prices increase, fishing vessels stay ashore From the Lunar New Year to now, due to increasing oil prices, many fishing boats in the North Central Coast region are still lying on the shore and have not gone out to sea to catch fish. Mr. Phan Van Hai, Chairman of the Fisheries Association of Quynh Lap Commune in Hoang Mai Town in Nghe An Province, said that the whole commune had about 160 vessels specializing in offshore fishing, but only about 70-80 vessels had gone out to sea because oil prices climbed, and fishers were afraid to suffer losses. In the communes of Quang Thai, Quang Loi, Quang Hai in Quang Xuong District, Quang Dai, Quang Hung in Sam Son City of Thanh Hoa Province, a few numbers of rafts went out to sea, although it is the herring fishing season. At Hoa Loc fishing port in Hau Loc District of Thanh Hoa Province, more than 200 offshore fishing boats were staying ashore because oil prices escalated, the fishing ground has not yet abundant with seafood, and the weather was bad. At Lach Hoi fishing port in Sam Son City, more than 200 fishing vessels were lying ashore for the same reason.