Wednesday, 18/05/2011 17:29

Gas dealers vow to freeze prices

Members of the Viet Nam Gas Association committed themselves to freeze gas prices from now until the end of May, said chairman Nguyen Si Thang.

There were no factors affecting gas prices so member companies had pledged not to increase prices, Thang said.

The association also asked their members to examine their sales prices.

Thang said that domestic gas prices depended on the world market, despite the country being able to meet 40 per cent of domestic demand.

Gas demand on the world market in May and June was often low, Thang said, adding that prices in the domestic market would remain stable in June and July if the world market remained unchanged.

Gas prices have twice risen this month, with Sai Gon Petrol in HCM City following the VND30,000 (US$1.44) hike in 12-kg canister on May 1, with a VND4,000 increase to VND382,000 ($18) per canister on May 11.

Due to the hike, industrial companies especially pottery and ceramic tile producers are facing a number of difficulties.

Ly Huy Sang, Deputy Director of the Minh Long I Company Ltd which produces ceramic products said his company's operation had been strongly affected by the hike in gas prices as it was a key input in pottery production.

Current gas prices now accounted for 40 per cent of total production costs, marking a 10 per cent rise, Sang added.

Agreeing with Sang, deputy director of the Italian Home Ceramic Tiles Company Ltd Nguyen Van Vu said that his company now could not compete as the input costs had surged after the new gas price was announced.

He also bemoaned the fact that the company could not store gas because of safety concerns and high cost

Facing such obstacles, companies are finding ways to cut expenditure.

According to Sang, his company had reduced production processes for some products while retaining quality.

Some products were now just baked once, rather than twice in order to save gas and time, he said.

Italian Home had also adopted alternative energy solutions.

His company now used low-pressure gas instead of gas and coal to produce ceramic tiles, Vu said.

This energy was much cheaper than gas, he added.

Increasing gas prices have not only affected industrial companies but also gas suppliers as industrial gas sales had declined by 10-20 per cent in recent months.

Industrial gas suppliers have sometimes resorted to accepting break-even prices in order to retain their customers.

vietnamnews

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