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.
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.