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A long-term solution needed
Many businesses and consumers say they now have no choice but to tighten their belt following the Ministry of Finance’s recent decision to raise petrol prices and are longing for a long-term solution from the Government and the relevant ministries to control market prices.
Nguyen Thi Thao, a bus owner from Rang Dong Bus Cooperative in Ho Chi Minh City, said she was shocked to pay the bill after her bus filled up with fuel at a petrol station on 1B Pham Ngu Lao Street on July 21.
“With the new price adjustment, I will face a loss of VND150,000 every day. I wonder whether my bus can leave the station in the coming days,” Mrs Thao said. “The cooperative has had to incur losses since the first adjustment to petrol prices in February this year and I think this will be a serious blow.”
Nguyen Ngoc Lu, a member of the Ho Chi Minh City Transport Association, said that the new petrol prices will certainly affect transport businesses which are encountering difficulties in transporting tonnes of unloaded commodities at ports. He said that transport costs should increase by at least 10 percent to cover losses.
The Ministry of Finance has forecast that the new petrol prices would drive the consumer price index (CPI) up by at least 0.5-0.7 percent. According to Minister of Finance Vu Van Ninh, as petrol is considered the most important input material for many economic sectors, any adjustments to petrol prices will directly affect business operations and people’s lives as a whole.
At a press briefing in Hanoi on July 21, he explained that the relevant ministries had set a suitable price level while drafting options for an adjustment. The Government has also asked ministries and sectors to control input materials to prevent a hike in production costs and to ensure that other commodities could not be left hanging.
He affirmed that despite recent price rises, the Government will maintain a stable price policy for electricity and water supplies and public transport services until the end of this year, but not for coal. However, businesses can also propose price adjustments in case they continue to suffer huge losses.
A long-term solution needed
Many businesses and consumers are also concerned about a domino effect following the Ministry of Finance’s decision to raise petrol prices.
“The adjustment is expected to drive up Bai Bang paper mill’s production costs by an additional VND5.778 billion over the remaining months of this year,” said a representative of the Vietnam Paper Corporation.
He said the corporation has a diesel oil (DO) and fuel oil (FO) fired power plant and it needs 550 tonnes of FO and 1,100 tonnes of DO to run the plant for the next six months. However, he affirmed that the corporation will practise thrift to keep paper prices unchanged for the new school year.
Meanwhile, Nguyen Van Bien, an official from the Vietnam National Coal Mineral Industries Group (Vinacomin), complained that the new petrol prices will cause coal production costs to increase by an additional VND350-400 billion or 2.3-2.5 percent by the end of this year. This means that buyers will have to pay an additional VND14,000-15,000 for a tonne of coal. However, any adjustments in coal prices will be decided by the Government, as this product is included in the list of State-controlled products, said Mr Bien.
In his estimation, with the new petrol prices, the group will lose VND400 billion from its revenue this year and face more difficulties in opening new mines to meet the national economy’s increasing demand for coal from now until 2015.
In brief, both businesses and consumers hope that the Government, ministries and relevant agencies should adopt a long-term solution to keep market prices in check and minimise the impact on business operations and people’s lives as a whole.
VOV
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