Freight rates increase with gasoline prices?

After four consecutive increases in gasoline prices, many businesses have been “stirring” up plans to increase transportation fares. If this happens, it will affect consumers.

Businesses "wait and see"

From September 5, the Ministry of Finance - Ministry of Industry and Trade decided to increase gasoline prices simultaneously. Specifically, RON 92 gasoline increased by 306 VND/liter, E5 gasoline increased by 285 VND/liter, diesel 0.05S increased by 155 VND/liter, kerosene increased by 149 VND/liter, and fuel oil 180CST 3.5S increased by 43 VND/kg. This is the 4th consecutive time gasoline prices have increased, with a total increase of 1,777 VND/liter (equivalent to an increase of 10.8%) since July 2017.

Since the beginning of 2017, with 7 price increases (2,934 VND/liter more) and 7 decreases (2,682 VND/liter less), 3 price adjustments keeping the same price, gasoline price has increased by 261 VND/liter.

From September 5, A92 gasoline price increased by 306 VND/liter.

It has been noted that in previous times when the transportation market increased fares following gasoline prices, when gasoline prices increased by about 5%, businesses would consider adjusting fares to offset input costs. Therefore, this time, the increase in gasoline prices by 10.8% and diesel prices by 8.6% will also make transportation businesses "restless" to propose fare increases.

Many transport companies, when asked, said they were “watching” the market and had not yet sent an official price increase plan to the authorities, but affirmed that if the price of gasoline increased, it would be difficult for them to “tighten their belts”. However, increasing prices is not simple.

Mr. Nguyen Van Thanh, Chairman of the Vietnam Automobile Transport Association, said that traditional transport businesses are facing fierce competition, especially with technology-based transport, which often has strong promotions and discounts. Not to mention, each time a fare adjustment plan is submitted, it has to go through many procedures...

According to Mr. Nguyen Anh Quan, Vice President of Hanoi Taxi Association, the current adjustment of gasoline prices is only 15 days in cycle, but transportation and taxi businesses can hardly increase or decrease continuously in that cycle, so they have to calculate and plan their business for a certain period of time.

Experts say that in a fair competitive environment, transport businesses must solve the problem of reasonable cost structure, whether the price increase plan will be accepted by the market or not? Current transport fares are completely determined by the market, so the price must be competitive in both price and quality.

Do not approve fare increase according to gasoline price

According to Mr. Dao Viet Long, Head of Transport Management Department (Hanoi Department of Transport), in August 2017, Hanoi Department of Transport received registrations for plans to increase transport fares, but did not approve them because the proposed enterprises did not comply with the regulations on pricing plans, did not show the costs to make up the price, and did not have adjacent price calculation cost columns for comparison.

Many transport companies are anxious to increase fares following rising gasoline prices to offset costs.

At the same time, the Department of Transport issued Document No. 2522/SGTVT-KHTC on stabilizing passenger transport fares by car, the content of the document requested transport enterprises in the city to review the cost components of the price; not declare increased fares, proactively adjust fares down, organize fare collection according to the declared plan, send documents and price plans to the Hanoi Department of Transport.

It is known that Circular 233/2016/BTC of the Ministry of Finance on amending and supplementing a number of articles of Circular 56/2014/TT-BTC dated April 28, 2014 of the Ministry of Finance guiding the implementation of Decree 177/2013/ND-CP dated November 14, 2013 of the Government detailing and guiding the implementation of a number of articles of the Law on Prices has clearly stipulated that if a business increases prices within the range of 5%, they have the right to proactively increase, but must submit a price declaration to the Department of Transport, where the business is registered for business. Therefore, businesses must be honest in their declaration, specifying the basis for proposing a price increase...

According to Tin Tuc Newspaper