Le Thanh Son, a senior executive of Anh Phu Paper Company in Que Vo Industrial Zone of Bac Ninh province, said that he heard the news about the petrol price increase just some days after the news about the 20 percent environment fee.
Son said that the petrol price increase would only have moderate impacts on the production, if businesses could access capital sources at moderate costs. However, as the lending interest rates stay sky high, businesses would not be able to hold out in the current circumstances, where difficulties attack them from all sides.
The problem for businesses is that though everything is getting more expensive, from the input material prices, labor cost to bank loan interest rates, they may dare not raise the sale prices of finished products.
Vu Thi Hau, the owner of Fivimart retail chain, also said that despite the input material price increases, the prices of goods and services would only increase slightly, while some manufacturers won’t raise their sale prices.
Having affirmed that there won’t be a strong price increase wave, Hau said that the demand is very weak. Goods have been selling very slowly, while the sales in Tet season were lower than the same periods of the last years. Manufacturers would have to consider the market demand to decide their pricing policies.
Meanwhile, some taxi firms in Hanoi have said that they would raise the service fee by 500 dong per kilometer to cover the 10 percent petrol price increase. They said that the petrol price increase, plus the high bank loan interest rates would make the costs unbearably high for them.
However, no taxi service fee increase has been announced so far, while taxi firms still have to explore the situation and keep watch over the moves of their rivals before making their decisions.
Nguyen Van Khoi, Director of Vy Linh Tourism and Transport Company, said that it would take transport companies some more time to follow necessary procedures to raise the service fee. They would have to report the service fee increase to the local transport department, finance department, taxation body and then the inspection center.
“For the time being, taxi firms would have to bear loss,” Khoi said.
Tran Anh, Director of Hoang Mai Service Company in Hanoi, which specializes in serving tourists, said that while people try to cut down spending on traveling, raising transport fee would not be a good solution to stimulate the demand.
Anh said that transport companies now compete with each other to attract more customers. “If you spontaneously raise fees, you are going to end up killing yourself,” he said.
“Therefore, I won’t make any decisions before I consider the situation thoroughly and consult with others,” he said.
A director of a Hanoi-based food company said that after talking with an official of the Ministry of Industry and Trade on March 7 morning, he took for granted that the petrol price would not increase in the short term. Therefore, he distrusted his own ears in the afternoon when he was told about the petrol price increase.
The businessman called the 10 percent price increase (2100 dong per liter) a “terrible increase” which will create big impacts on the market.
Meanwhile, Nguyen Tien Thoa, a senior official of the Ministry of Finance, said that the 10 percent price increase is not big enough for petroleum distributors to make profits. Thoa said in the meeting with local press that the increase of 6000 dong per liter would be high enough to satisfy distributors.
Thanh Dung – Tran Thuy
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