Gasoline prices rise, transport companies prepare to increase fares

The sudden increase in the price of RON 92 gasoline by nearly VND 2,000/liter, from VND 17,280/liter to VND 19,230/liter at 9:00 p.m. on May 5, has affected many industries, however, the impact is not large.

According to Mr. Nguyen Van Thanh, Chairman of the Vietnam Automobile Transport Association, gasoline accounts for 45-50% of the operating costs of transport businesses.

The gasoline price increased by nearly 2,000 VND/liter, equivalent to about 14%, a significant increase that will certainly affect the operations of transportation businesses.

Illustration photo: VNA

In the immediate future, taxi transport businesses will be affected, but not much. Passenger transport businesses using oil will not be affected yet.

According to Mr. Thanh, it is expected that businesses will consider increasing taxi fares by 4-5%. However, businesses are also calculating the specific adjustment level, because issues related to price declaration procedures, changing price lists, taximeters, etc. will take a lot of time and cost for businesses.

“Currently, no business has registered to increase prices, but if in the near future, world oil prices continue to increase, causing domestic oil prices to increase further, transport businesses will be forced to consider increasing fares,” Mr. Thanh said.

Representative of the taxi company, Mr. Dinh Van Sau, Chairman of Huong Lua Taxi, said that this increase in gasoline prices has affected the business. However, Huong Lua will still try to hold on, reduce other input costs to maintain fares, and join hands to share difficulties with the people.

However, Mr. Sau also affirmed that if gasoline prices continue to increase in the next adjustment, businesses will be forced to recalculate and rebalance to adjust fares.

In other manufacturing industries such as steel and fertilizer, representatives of business associations said that the recent increase in gasoline prices has not had much impact on business production activities.

Vice President of the Vietnam Steel Association Nguyen Van Sua said that transportation costs only account for a small part of the price structure of steel manufacturing enterprises, but when transportation costs increase, it will also affect manufacturing enterprises.

Businesses will continue to have to cut production costs to avoid increasing product prices. Up to now, the association has not received any feedback from businesses regarding this issue.

Mr. Nguyen Hac Thuy, Permanent Vice President of the Vietnam Fertilizer Association, also assessed that gasoline only accounts for a small part of the cost of finished products of enterprises. Therefore, when gasoline prices increase, it will not have much impact on fertilizer production enterprises.

Businesses will cut other costs to offset this price increase. The current difficulty for fertilizer manufacturing businesses lies in Law 71 on VAT for fertilizer products.

On May 4, the world oil price suddenly increased to 80.89 USD/barrel, causing the base price of petroleum products calculated on May 5 to be about 3,300 VND/liter higher than the selling price. This is the reason why the Ministry of Industry and Trade and the Ministry of Finance decided to increase the price of gasoline to 1,950 VND/liter.

According to Vietnam+