Market developments after oil prices decrease?

(Baonghean) - Gasoline prices continue to decrease for the 13th time this year. This brings joy to consumers. However, for essential goods and transportation costs to decrease, people still have to wait...

Transaction at a gas station on Le Hong Phong Street (Vinh City). Photo: Cong Sang

At the Hung Phuc Ward gas station (Vinh City), Mr. Nguyen Duc Son was refueling his vehicle and happily said: “I, like everyone else, am very excited about this price reduction. Especially at the end of the year, the price of gasoline has decreased, making it very convenient for traveling and visiting relatives. People who use cars like us will save a lot of money…”.

At the Hung Binh gas station, we met Ms. Nguyen Thi Mai pumping gas. She was also very excited after this gas price reduction. She shared: “With the price of gasoline dropping so much, we hope that transportation prices and some other essential goods will also decrease so that each household can save some money, serving shopping when Tet is approaching…”. In general, all people were excited to receive the good news of the gasoline price reduction, and from there, they expected other goods to decrease to help each family improve their lives.

For Mr. Ho Van Tuan, in Quynh Long commune (Quynh Luu), a fishing boat owner who regularly goes out to sea to fish, when he heard that oil prices continued to decrease, he calculated: “So, each trip at sea, we can save more than 4 million VND in fuel costs. My 500 CV boat usually spends at least 4,000 - 5,000 liters of oil, if each liter is reduced by nearly 1,000 VND, each trip will also save several million VND. Like the most recent reduction in gasoline prices, if we go 2 - 3 trips a month, we will reduce costs by nearly 15 million VND/month. For fishermen, that is a decent amount of money, helping to make life less difficult for their families, and giving the crew more motivation when going out to sea...”. As for owners of boats under 20 CV, when gasoline prices decrease, it also contributes to saving a lot of costs.

Mr. Le Van Truong, Tan Minh hamlet, Quynh Lap commune (Hoang Mai town) said: “Nearshore fishing does not cost necessities, but it does cost fuel, because every afternoon we have to take the boat out to sea to fish, and the next morning we bring the boat back to shore, each night also consuming about 100 liters of oil. Many times when the wind is strong and the current is against us, the catch cannot cover the cost of fuel. Therefore, if the price of oil decreases, our income will certainly be better, so all of us fishermen are very happy.”

In previous petrol price reductions, the Transport sector has reduced fares, so people expect that with this deep petrol price reduction, the transport sector should also make appropriate adjustments. Discussing this issue, Mr. Phan Dinh Khan - Chairman of Nghe An Passenger Transport Joint Stock Cooperative said: "The unit has 130 vehicles running fixed routes from Ho Chi Minh City to Mong Cai (Quang Ninh). On November 24, 2014, the Cooperative reduced transport fares after the average petrol price reduction was from 4% to 22% along the route. The Vinh - Yen Thanh route was reduced from 45,000 VND to 35,000 VND, Vinh - Do Luong was reduced from 50,000 VND to 40,000 VND... the above fares have been recognized by customers. During this period, we are also developing a plan to reduce fares, but the reduction in fares will be implemented after the New Year's Eve...".

Mr. Vu Hoang Huynh - Head of Vinh Bus Station, said that some bus companies responded quickly after the reduction in fuel prices this time, such as Hoang Quan bus company running the Vinh - Hue route, which reduced the price from 170,000 VND to 130,000 VND along with a customer appreciation program. The Vinh - Mong Cai route reduced by 25% from 400,000 VND to 300,000 VND. To ensure the rights of passengers, Vinh Bus Station also strengthened measures to manage ticket prices. Require bus companies to publicly post prices according to regulations. Propagandize and mobilize bus companies and businesses to adjust transportation fares in the direction of reducing fuel prices.

Mr. Hoang Minh Quan - Head of Price and Public Asset Management Department (Department of Finance) said: “Immediately after the previous reduction in gasoline prices, the department issued Official Letter No. 14185/BGTVT and coordinated with the Department of Transport to announce and commit to reducing fares with transport businesses in the province. Currently, 17 transport businesses in the area have reduced fares, but there are still 7 units that have not reduced prices as committed. For this reduction, the department also sent an official letter to the units requesting to develop a roadmap for reducing fares.”

According to Mr. Quan's prediction, with the current fuel price, the transportation fare will decrease by about 2% to 5%, which is reasonable. However, it is likely that transportation businesses will not reduce prices before Tet, because they are collecting due to high passenger demand, some bus routes have to increase the number of trips in the outbound or return direction, so they use the surcharge as an excuse not to adjust prices. In order to soon have a roadmap to reduce transportation fares, the Transportation Association plays a very important role, because this is the focal point to gather transportation businesses to discuss, decide on unified actions, and protect consumer rights.

The decrease in gasoline prices is a great joy for most people, but it seems that in order for essential goods and transportation costs to decrease, people still have to wait for the active participation of authorities and businesses...

Anh Tuan - Pham Bang