Freight rates: Failure to reduce will result in license revocation.

On December 22nd, the Ministry of Transport issued a document requesting local Departments of Transport to strengthen control over transport fares, ensuring that fare adjustments are consistent with the decrease in fuel prices.

Goods are being transported at the Hoc Mon wholesale agricultural market in Ho Chi Minh City on the afternoon of December 22nd. Business owners are complaining bitterly because transportation companies have not yet reduced freight rates.

Specifically, the Department of Transport must require transport businesses to re-declare their fares, especially the costs that make up the fare. In particular, the Department of Transport must coordinate with the Department of Finance to inspect and monitor the implementation of fare declarations and postings. If violations are detected, they must be dealt with decisively and severely, possibly even resulting in license revocation.

Fuel prices have fallen sharply, while transportation costs remain unchanged.

Previously, the Ministry of Finance sent a document to the Ministry of Transport requesting that transport businesses be urged to reduce freight rates, as rates remained unchanged despite continuously falling fuel prices, which are currently at a low level. Speaking to Tuoi Tre newspaper, Mr. Nguyen Anh Tuan, Director of the Price Management Department - Ministry of Finance, said that since mid-September, fuel prices have fallen sharply, with diesel prices being significantly reduced by 1,250 VND/liter on December 18th, while transport rates have not decreased.

According to calculations by the Ministry of Finance, compared to July 1, 2015, current gasoline prices (December 18) have decreased by 20.8%, helping to reduce the cost of gasoline-powered vehicles by 5.2-7.3% depending on the vehicle's fuel consumption. Similarly, the price of 0.05S diesel fuel at the same time decreased by 25.5%, helping diesel-powered vehicles reduce their cost by 8.9-11.5%.

Meanwhile, compared to three months ago (September 18), gasoline prices have now decreased by 8.6%, helping to reduce transportation costs for gasoline-powered vehicles by 2.2-3%, while diesel 0.05S prices have decreased by 13.7%, with corresponding transportation costs of 4.8-6.2%.

Mr. Tuan stated that this provides a basis for the Ministry of Finance to request the Ministry of Transport to direct local transport departments to take the lead and coordinate with finance departments and other relevant agencies to strengthen the management of transport fares, in order to ensure consumer rights and contribute to price stability in the market in general.

Many taxi passengers complain that although fuel prices have fallen, fares have not decreased - Photo by Huu Khoa

Take strong action against businesses that are reluctant to reduce freight rates.

"If businesses are reluctant to lower fares, the transport management agency will not only impose administrative penalties but also revoke their business licenses," Mr. Tuan affirmed.

According to Mr. Tuan, to determine exactly how much freight rates should be reduced, a comprehensive assessment is needed, including all the costs that make up freight rates such as wages, electricity, clean water, etc. However, Mr. Tuan noted that fuel accounts for 30-40% of freight costs, so a significant drop in fuel prices while freight rates remain unchanged is unacceptable.

Meanwhile, Mr. Phan The Rue, former Deputy Minister of Industry and Trade, argued that when oil prices fall, the economy and consumers should benefit. However, for the past two years, the situation of many transportation businesses being reluctant to lower fares or reducing fares disproportionately has continued. In particular, most taxi companies refuse to reduce fares.

"Gasoline prices have dropped sharply for the past two months, but taxi fares haven't increased, which is very unreasonable," Mr. Ruệ emphasized. According to Mr. Ruệ, many believe that when crude oil prices fall, Vietnam benefits 60% and suffers 40%. However, if the government doesn't manage things well and regulatory agencies don't closely monitor the situation, the economy and consumers won't benefit the full 60% while still bearing the full 40% loss.

According to Mr. Ruệ, this is a matter for the State. The regulatory agency needs to be more resolute and closely monitor price management, especially since transportation costs account for a significant portion of the cost of goods. "If any enterprise is reluctant to reduce transportation costs in line with the reduction in fuel prices, the State should suspend its operations and stop granting licenses for new routes..." Mr. Ruệ suggested.

According to News