Gasoline prices forecast to increase slightly in the operating period on June 12; Airfares will remain high

Gasoline and oil prices are expected to increase slightly in the operating period on June 12.

Gasoline and oil prices on June 12 are expected to increase following the world trend. If the management agency spends the stabilization fund, fuel prices may remain the same or decrease slightly.

The adjustment dates for gasoline and oil prices are usually on the 1st, 11th, and 21st of each month, but the adjustment date of June 11 falls on a Sunday. Therefore, according to the provisions of Decree 95, the adjustment date for gasoline and oil prices will be postponed to the next working day, which is June 12.

In the world market, last week, oil prices recorded their second consecutive week of decline. Both benchmark oil products fell by more than 1 USD. At the end of the week, Brent oil prices fell to 74.79 USD/barrel, WTI oil prices were at 70.17 USD/barrel.

Gasoline and oil prices are forecast to increase slightly in the operating period on June 12.

Analysts said the announcement of Saudi Arabia’s production cuts had lifted oil prices a bit. But rumors of Iran’s return to the global oil market as a supplier had caused prices to fall further. Investors are now in a wait-and-see mode until inventories are more clearly reduced.

In the domestic market, according to forecasts from petroleum businesses, if the world's petroleum prices fluctuate and continue to increase today (June 12), it is forecasted that domestic retail prices of petroleum may be adjusted up by VND200-300/liter. In addition, the adjustment of petroleum prices this time will also depend on the allocation of the Petroleum Price Stabilization Fund and other adjusted fees, if any.

Previously, in the most recent adjustment period (June 1), gasoline prices were adjusted up by the Ministry of Finance and Industry and Trade.

Accordingly, the price of RON 95 gasoline increased by 520 VND/liter, the selling price is 22,010 VND/liter. E5 RON 92 gasoline increased by 390 VND/liter, to 20,870 VND/liter.

Oil prices were adjusted down. Specifically, diesel prices decreased by VND10/liter, down to VND17,940/liter. Kerosene prices decreased by VND190/liter, down to VND17,770/liter.

In this operating period, the operating agency does not spend the Gasoline and Oil Price Stabilization Fund and sets aside 300 VND/liter for the Fund for gasoline and oil.

Airfares will remain high despite falling oil prices

Aviation experts predict that although oil prices have decreased, airfares may remain high in the near future.

Airfares were already rising as demand for air travel gradually recovered from 2022 as countries lifted COVID-19 restrictions. But this year, just as airlines were expecting passenger numbers to return to pre-pandemic levels, airfares really started to rise.

Passengers passing through Vinh Airport. Photo: Viet Phuong

In France, figures from the country’s civil aviation authority show that the average airfare in April 2023 was 32.6% higher than the same period four years earlier. Airfares to the Asia-Pacific region alone rose by 51%. In the US, an index published by the Federal Reserve Bank of St Louis showed airfares rose 11% between April 2019 and April 2023. Fares have continued to rise despite oil prices falling from their peak in early 2022 when the conflict in Ukraine broke out.

The International Air Transport Association (IATA) estimates fuel prices will fall to an average of $98.50 a barrel this year, down from $135.60 a barrel last year.

Fuel, which accounts for about 25%-30% of airlines’ costs, is often a significant factor in ticket prices. However, according to IATA chief economist Marie Owens Thomsen, factors such as labor costs and other supply chain costs are still rising. Airlines will have to find ways to offset these costs if they do not want to return to losses just as they are recovering and are still struggling to pay off the huge debts accumulated during the COVID-19 pandemic.

The main problem now is not the price of oil but the fact that demand is too high while transportation capacity cannot meet it in time; companies are still struggling to meet delivery targets due to lack of parts or materials.

There are few factors that can help reduce airfares in the current climate. And with airlines investing hundreds, if not trillions, of dollars in new planes and renewable fuels to meet their 2050 decarbonization goals, IATA economist Owens Thomsen says airfares are unlikely to fall anytime soon.

Businesses step up rice purchases to meet delivery deadlines

Rice prices in the Mekong Delta remained unchanged today (June 12). Businesses are currently stepping up purchases of rice from farmers to meet delivery deadlines.

Accordingly, AG sticky rice (dry) is priced at around 8,000 - 8,400 VND/kg, Long An sticky rice (dry) is priced at around 8,400 - 8,800 VND/kg; OM 18 is purchased by traders at 6,800 VND/kg; OM 5451 rice is priced at 6,300 - 6,500 VND/kg. IR 50404 rice is priced at 6,200 - 6,400 VND/kg. Nang Hoa 9 rice is purchased by traders at 6,600 - 6,800 VND/kg. Dai Thom 8 rice is priced at 6,800 - 7,000 VND/kg. Nhat rice is priced at 7,800 - 8,000 VND/kg. Nang Nhen rice (dry) is priced at 13,000 VND/kg; AG sticky rice (fresh) costs 6,200 VND/kg.

Currently, businesses are stepping up rice purchases from farmers to meet delivery deadlines.

Regarding rice, the prices of raw rice and finished products remained stable. Accordingly, the price of raw rice fluctuated around 9,500 - 9,700 VND/kg; finished rice was at 10,850 - 10,950 VND/kg. Regarding by-products, the price of broken rice remained stable while the price of dry bran increased by 50 VND/kg. Accordingly, the price of broken rice remained stable at 9,400 - 9,500 VND/kg; dry bran was 7,400 - 7,600 VND/kg, an increase of 50 VND/kg.

According to traders, raw rice supplies are low today. Traders said they are stepping up purchases of rice from farmers to fulfill export contracts this year.

In the export market, the export price of 5% broken rice from Vietnam is being offered at 498 USD/ton. Meanwhile, the price of 25% broken rice is at 478 USD/ton; Jasmine rice is 578 USD/ton.

Vietnam's rice export prices have continuously increased and remained high over the past week. Meanwhile, Thailand and Pakistan's rice export prices have continuously decreased.

Will domestic coffee prices continue to increase?

Coffee prices last week unexpectedly increased continuously with large amplitude in both domestic and world markets.

In the domestic market, coffee prices at times exceeded 65,000 VND/kg, the highest price ever in the domestic market.

Coffee prices are expected to continue to rise due to supply shortages and concerns that next year's supply will decrease due to the impact of El Nino.

According to experts, the main reasons for the sharp increase in coffee prices include: Scarcity of Robusta supply globally. It is forecasted that Robusta supply in 2023 will decrease by about 10 - 15% compared to 2022. In addition, due to the impact of the El Nino phenomenon, increased drought may cause the 2023 - 2024 coffee crop year in Vietnam and Indonesia to decrease (Vietnam is the world's largest Robusta coffee exporter, Indonesia is a major coffee exporter), which makes coffee prices in the coming time forecast to continue to increase and reach new peaks.

Coffee prices today, June 12, in the domestic market fluctuated from 64,100 - 64,900 VND/kg, an increase of 3,400 - 3,600 VND/kg compared to the same period last week.

Specifically, the highest price of coffee in Dak Nong province was 64,900 VND/kg; the price of coffee in Dak Nong province was 64,800 VND/kg; the price of coffee in Gia Lai province was 64,500 VND/kg and the average price of coffee in Lam Dong province was 64,100 VND/kg.