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Diesel price not decreased yet, why?
The petrol prices have decreased by approximately 40% over the highest peak. In general, the petrol and diesel prices are always adjusted at the same time. However, this did not happen with the latest petrol price decrease, as the diesel price remains unchanged.
Meanwhile, a diesel price decrease is what is most expected by enterprises. Head of a coach group, belonging to Hanoi Transerco, said that diesel price is the factor that decides travel ticket prices.
“We have had cut down the ticket price by 30% in accordance with the diesel price decreases last time. We planned to cut down the ticket price further, but the plan failed because the diesel price did not decrease despite the latest petrol price decrease on December 10, 2008,” he said.
Meanwhile, a construction company said that the expenses for equipment, especially the spending on diesel, accounts for a big proportion in the construction cost. As the diesel price has not decreased yet, enterprises are not able to adjust the construction prices, which will make their competitiveness weaken.
Why hasn’t the diesel price decreased, then?
Vuong Tien Dung, Deputy General Director of Petrolimex, the biggest petrol and oil product distributor currently in Vietnam, said that enterprises cannot cut the prices more, or they will incur loss. Dung said that diesel always has the highest import price among imported petrol and oil products. The average price of the product in the last 20 days has been $62/barrel.
The diesel price, offered by Singaporean suppliers, the main import source for Vietnam, is $61.27/barrel, while the petrol price is $42.25/barrel. With such an import price, the diesel price will be VND 10,000/litre after taxes and fees, not including the spending on sales agents.
Diesel price lowering will bring the same effects as tax decreases
Associate Professor Ngo Tri Long, from the Finance Institute, asserted that it is necessary to cut the diesel price because of its important role in production and the national economy.
“When the input material prices decrease, the production costs will go down, which will make businesses become more enthusiastic in re-starting investment projects. Cheaper products will stimulate consumers to spend more money, thus helping stimulate the demand,” Long said.
The Government is planning to cut the corporate income tax by 30%, but it still maintains high diesel prices with the current high import tax of 25%. Besides, enterprises are also imposed 10% for VAT, and 10% for luxury tax.
Economists believe that the lowering of diesel prices and the maintaining of tax rates low enough to help businesses reduce production costs will bring about effects, not smaller than the tax decreases
Meanwhile, Dung from Petrolimex, said that Petrolimex and other enterprises will reduce diesel sale prices if the import tax goes down.
Phuoc Ha
vietnamnet
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