Within a month, retail petrol prices had increased for three consecutive times, with the latest rise on February 11. (Photo: VNA) Hanoi (VNA) – The escalating oil andgas prices would reduce and even neutralise the effect of the 2-percent VAT cut which was intended to stimulate consumption, stir growth and reduce inflation pressure, thus resulting in failure to achieve the growth target, losses to the budget and rising inflation, according to Nguyen Bich Lam, former Director General ofthe General Statistics Office (GSO).
Within a month, retail petrol prices had increasedfor three consecutive times, with the latest rise on February 11.
The hike was due to the soaring global oil and gasprices, plus a reduction of Nghi Son Refinery and Petrochemicals LLC’s output due to financial difficulties, the expert explained.
The prices would continue to surge in the time aheadas countries are restoring production, business, transportation and tourismservices after the COVID-19 hiatus, Lam said, citing an announcement of the Organisation of the Petroleum ExportingCountries (OPEC) on February 10 that world oil demand might rise evenmore steeply this year as the global economy posts a strong recovery from thepandemic, a development that would underpin prices already at a seven-yearhigh.
The rising global oil and gas prices will affect domesticproduction as oil and gas cost makes up around 3.52 percent of the economy's total production costs, thus pushing up product prices, he said, adding that the impactcan be felt clearly in such areas as fishery and transportation.
Moreover, the high oil and gas prices wouldexacerbate pressure on the consumer price index (CPI), weaken competitivenessof made-in-Vietnam products and hamper economic growth indirectly.
According to Lam, a 10 percent increase in oil and gas prices resultsin a 0.5 percent decrease in the national gross domestic product (GDP), anda 0.36 percentage point rise in CPI.
To achieve socio-economic targets this year, withGDP growth set at about 6-6.5 percent and CPI at around 4 percent, Lamsuggested the Ministry of Industry and Trade take synchronous solutions toensure the long-term supply of oil and gas.
The ministry should propose the Government expandand improve the capacity of oil and petrol reserves for the long run, thus easing thereliance on and adverse impacts of rising global oil and gas prices.
The Ministry of Industry and Trade, the Ministry ofFinance and businesses need to keep a close watch on the world’s oil and gasmarket and political developments that can affect supplies, so as to timely set out flexible countermeasures, whileraising domestic exploitation and refinery capacity, he said./.
Within a month, retail petrol prices had increasedfor three consecutive times, with the latest rise on February 11.
The hike was due to the soaring global oil and gasprices, plus a reduction of Nghi Son Refinery and Petrochemicals LLC’s output due to financial difficulties, the expert explained.
The prices would continue to surge in the time aheadas countries are restoring production, business, transportation and tourismservices after the COVID-19 hiatus, Lam said, citing an announcement of the Organisation of the Petroleum ExportingCountries (OPEC) on February 10 that world oil demand might rise evenmore steeply this year as the global economy posts a strong recovery from thepandemic, a development that would underpin prices already at a seven-yearhigh.
The rising global oil and gas prices will affect domesticproduction as oil and gas cost makes up around 3.52 percent of the economy's total production costs, thus pushing up product prices, he said, adding that the impactcan be felt clearly in such areas as fishery and transportation.
Moreover, the high oil and gas prices wouldexacerbate pressure on the consumer price index (CPI), weaken competitivenessof made-in-Vietnam products and hamper economic growth indirectly.
According to Lam, a 10 percent increase in oil and gas prices resultsin a 0.5 percent decrease in the national gross domestic product (GDP), anda 0.36 percentage point rise in CPI.
To achieve socio-economic targets this year, withGDP growth set at about 6-6.5 percent and CPI at around 4 percent, Lamsuggested the Ministry of Industry and Trade take synchronous solutions toensure the long-term supply of oil and gas.
The ministry should propose the Government expandand improve the capacity of oil and petrol reserves for the long run, thus easing thereliance on and adverse impacts of rising global oil and gas prices.
The Ministry of Industry and Trade, the Ministry ofFinance and businesses need to keep a close watch on the world’s oil and gasmarket and political developments that can affect supplies, so as to timely set out flexible countermeasures, whileraising domestic exploitation and refinery capacity, he said./.
VNA
