Businesses already struggling to survive in both domestic and international markets are going to be very hard hit by the second rise in fuel prices in less than two months, economists say.
Dr Nguyen Minh Phong of the Hanoi Institute for Social and Economic Development Studies told the Tuoi Tre newspaper that the increase in petrol prices will lead to increases in the prices of many goods and services, affecting the consumer price index (CPI).
Given the difficult economic situation, the impact of recent increases in fuel prices will be by no means negligible, he said.
Economist Le Dang Doanh said that the two increases since the beginning of the year have pushed up petrol prices by 3,000 VND per litre. This was a heavy burden to businesses because besides the high interest rates, they will have to bear higher material costs.
"They will be unable to stand one day," he said.
In addition, higher input costs will make Vietnamese goods less competitive in the world market, Doanh said.
According to the Ministry of Finance, the latest hike in fuel prices will lead to an increase of about 0.3 percent in CPI, but several businesspersons say that the hike in fuel prices amid the current economic difficulties is a knock-out punch.
They say many businesses will be forced to stop production and trading activities.
Nguyen Phuc Tien, deputy general director of the Van Thanh Mousse and Foam Company, said fuel accounts for 3 to 5 percent of production costs. For transportation alone, his company spent about 1 billion VND (47,600 USD) a month to buy petrol.
With the latest increase in petrol prices, the company will have to pay a lot more money for fuel, he said. However, since purchasing power in the market is very low, the company will find it difficult to increase its selling prices to cover the higher costs, he added.
Nguyen Quang Trung, general director of Fico Tay Ninh Cement JS Company, said the higher fuel prices will have an enormous impact on people and businesses.
Businesses can not keep prices stable when all input costs go up. Consumers will be "victimised" since they have to bear the increase in prices, he said.
As expected, the prices of many kinds of goods and services have increased following the latest increase in fuel prices.
Nguyen Thanh Ha, deputy director of the Thu Duc Wholesale Market, said prices of many kinds of fruits and vegetables have gone up by thousands of dong per kilo.
The prices of goods and services at markets will surely increase in the next few weeks, she said.
Ngo Van Hai, deputy general director of the Citimart chain, told Nguoi Lao Dong newspaper that the supermarket has received announcements about price increases of 5 to 10 percent from many producers and providers who have not raised their prices after the previous increase in fuel costs.
Nguyen Phuong Thao, director of the Cong Hoa Maximark outlet, said about 20 suppliers planned to raise their prices by 8-10 percent.
Some travel transport service companies have said they will have to increase their fares corresponding to increases in fuel prices.
Many freight companies have said while they have not completed negotiations with customers about the new transportation prices after last month's fuel price hike, the latest increase will force them to raise transportation costs by about 5 percent in the next few days.
Taxi firms are finding it difficult to respond to the increase in fuel prices in quick succession.
Ta Long Hy, chairman of the HCM City Taxi Association, said the time lapse between two increases in fuel prices is rather small, so it is difficult for them to follow suit in applying new fares.
However, he said, sooner or later, they will have to make fare adjustments, otherwise they will die. -VNA
Dr Nguyen Minh Phong of the Hanoi Institute for Social and Economic Development Studies told the Tuoi Tre newspaper that the increase in petrol prices will lead to increases in the prices of many goods and services, affecting the consumer price index (CPI).
Given the difficult economic situation, the impact of recent increases in fuel prices will be by no means negligible, he said.
Economist Le Dang Doanh said that the two increases since the beginning of the year have pushed up petrol prices by 3,000 VND per litre. This was a heavy burden to businesses because besides the high interest rates, they will have to bear higher material costs.
"They will be unable to stand one day," he said.
In addition, higher input costs will make Vietnamese goods less competitive in the world market, Doanh said.
According to the Ministry of Finance, the latest hike in fuel prices will lead to an increase of about 0.3 percent in CPI, but several businesspersons say that the hike in fuel prices amid the current economic difficulties is a knock-out punch.
They say many businesses will be forced to stop production and trading activities.
Nguyen Phuc Tien, deputy general director of the Van Thanh Mousse and Foam Company, said fuel accounts for 3 to 5 percent of production costs. For transportation alone, his company spent about 1 billion VND (47,600 USD) a month to buy petrol.
With the latest increase in petrol prices, the company will have to pay a lot more money for fuel, he said. However, since purchasing power in the market is very low, the company will find it difficult to increase its selling prices to cover the higher costs, he added.
Nguyen Quang Trung, general director of Fico Tay Ninh Cement JS Company, said the higher fuel prices will have an enormous impact on people and businesses.
Businesses can not keep prices stable when all input costs go up. Consumers will be "victimised" since they have to bear the increase in prices, he said.
As expected, the prices of many kinds of goods and services have increased following the latest increase in fuel prices.
Nguyen Thanh Ha, deputy director of the Thu Duc Wholesale Market, said prices of many kinds of fruits and vegetables have gone up by thousands of dong per kilo.
The prices of goods and services at markets will surely increase in the next few weeks, she said.
Ngo Van Hai, deputy general director of the Citimart chain, told Nguoi Lao Dong newspaper that the supermarket has received announcements about price increases of 5 to 10 percent from many producers and providers who have not raised their prices after the previous increase in fuel costs.
Nguyen Phuong Thao, director of the Cong Hoa Maximark outlet, said about 20 suppliers planned to raise their prices by 8-10 percent.
Some travel transport service companies have said they will have to increase their fares corresponding to increases in fuel prices.
Many freight companies have said while they have not completed negotiations with customers about the new transportation prices after last month's fuel price hike, the latest increase will force them to raise transportation costs by about 5 percent in the next few days.
Taxi firms are finding it difficult to respond to the increase in fuel prices in quick succession.
Ta Long Hy, chairman of the HCM City Taxi Association, said the time lapse between two increases in fuel prices is rather small, so it is difficult for them to follow suit in applying new fares.
However, he said, sooner or later, they will have to make fare adjustments, otherwise they will die. -VNA
