The retail price of petrol in the Vietnamese market was officially raised by VND300-450 per litre from January 14, the first price rise in 2010. The sudden price increase is forecast to cause a heavy pressure on commodity prices, especially as the traditional Lunar New Year is coming and bank interest rates are escalating.
The State-owned Vietnam National Petroleum Corporation (Petrolimex), which currently holds 60 percent of the Vietnamese petroleum market share, said: “The gasoline price on global markets had hit nearly US$90 per barrel, a rise of about 8 percent from one month earlier. To avoid a loss, the corporation had to pick up the petrol price.
Recently, the International Monetary Fund (IMF) forecast that inflation in Vietnam may rise at a two-digit rate in the wake of strong credit growth. Rebounding prices of goods on global markets will also affect domestic prices. HSBC predicted that Vietnam will raise the base rate to the highest level in Asia. Thus, the petrol price change is intensifying CPI at this sensitive moment.
Goods on traditional markets jumped up only one day after the fuel price increase. LPG price was also added VND2,000 per 13-litre canister. The price is forecast to go up in the coming time at the back of higher fuel costs.
According to the Vietnam Goods Transportation Association, the previous increase of VND800 per litre had driven up operating costs by 10 percent. Normally, bus fare and airfare tend to look up during the Lunar New Year and the fuel cost rise further facilitates their move. The travel ticket is estimated to advance 7 percent although the operating costs added 5 percent.
Mr Do Huu Vu, Director of Thai Ha Seafood mini-supermarket, said, the preceding increase in gasoline prices have sent up seafood price by VND10,000 per kilo as production costs grew about 5 percent, plus the transportation costs.
Markets, department stores and mini-supermarkets have small reserves of goods because of storage and capital difficulties. Thus, when suppliers hike the prices increases due to fuel price rise, they must follow the step. Even, many other places have announced to prepare for the next price rise within this month, depending on price markets.
On January 13, Deputy Prime Minister Hoang Trung Hai said the Government had issued a decree on stabilising gasoline prices for a long time and annually spent VND54,000 billion to stabilise prices. Recently, the new mechanism not only helps stabilise petroleum prices but also helps reduce the state budget expenditure on the commodity.
Huong Ly
Vietnamese
