Consumers, businesses worn down by record gasoline prices

[ASEAN NOW News]

A consumer gets his bike refueled at a gas station in Ho Chi Minh City’s District 1. Photo by VnExpress/Quynh Tran

 

Gasoline prices surged 30 percent within a year to a record high forcing consumers to tighten their belts, while merchants and companies experienced additional losses.

 

VN Express reported that Vietnam gasoline prices hit a new all-time high of VND27,000 ($1.18) last week, after authorities adjusted them upward for the sixth time in a row.

 

Prices of popular gasoline RON 95 rose 27.5 percent year-on-year to VND26,830 per liter, while that of biofuel E5 RON 92 and diesel oil went up 33 percent to VND26,070 and VND21,310, respectively.

 

Thanh, a construction worker in HCMC’s Binh Chanh District, said it took him VND70,000 to fill the tank of his bike back then. Now, he spent VND110,000 to do so.

 

Having to travel long distances for work, he refuels his bike five times a month, which costs him an additional VND200,000.

 

"Not only gasoline, but all other expenses have also risen, costing me millions of dong more each month while my daily wage stands still at VND350,000," Thanh said.

 

Surging gasoline prices have driven Vietnam’s consumer price index up by 1.42 percent in February, according to the General Statistics Office.

 

Small retailers and merchants also struggled to profit as gasoline consecutively hit new peaks.

 

A vegetable stall in Xom Moi Market, HCMC's Go Vap District. Photo by VnExpress/Thi Ha

 

Le Phuong, a vegetable retailer at Minh Phung Market in HCMC’s District 6, said record-high gasoline prices drove her transportation costs up by nearly half a million dong each month, while prices of goods went up by 15 percent. She raised her sales prices by 5 percent.

 

Tien, a chicken wholesaler in Go Vap District said his fuel cost has doubled to VND600,000 each day, or VND18 million monthly.

 

He said he only made a profit of VND700,000 each day now, down from the previous VND1.2 million.

 

"My profits were eaten up by gasoline prices," he stressed.

 

Many companies, especially those in the transportation industry, said they are struggling to break even, never mind making profits.

 

Lam Dai Vinh, manager of HCMC-based Lam Vinh Transport JSC, said his company is bearing additional costs of VND800 million each month for fuel alone.

 

"Last year, we got a VND1,000 discount for each liter when buying in large quantities. Now we no longer receive discounts and must pay at retail price for diesel oil," he added.

 

Many transport firms in HCMC are negotiating with partners to raise their fares, while others plan to reduce operations or switch to other businesses to mitigate losses.

 

Most manufacturing firms stated their input costs had increased by 5-15 percent in the first quarter this year.

 

Heads of a supermarket chain in HCMC are eyeing the sales price surge. However, they said the purchasing power of the market is too weak.

 

Last Friday, the Ministry of Finance proposed lowering environmental tax on gasoline by 25 percent for the rest of the year to reduce fuel prices.

 

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