Gasoline prices drop, but commodity prices remain high

(Baonghean) - After each increase in gasoline prices, many consumer goods immediately "race" to increase their selling prices, causing difficulties for consumers. However, after 8 consecutive gasoline price reductions in the past 2 months, up to now, essential goods and transportation services still show no signs of decreasing...

Compared to the record price of 25,730 VND/liter of RON 92 gasoline in July 2014, up to now, after 8 consecutive adjustments, gasoline has decreased by 3,300 VND/liter (a decrease of about 13%); diesel has also decreased by 13 times with a total of 3,060 VND/liter... This is considered the deepest price reduction, extending the record level, making consumers expect that the prices of consumer goods will decrease accordingly. But in reality, due to many different reasons, prices of goods on the market are still "anchored" at a high level.

Goods are transported to Vinh market.

At Vinh wholesale market, Da Lat potatoes are retailing at 17,000 VND/kg, yellow sweet potatoes are 15,000 VND/kg, the prices of these two items have not changed for many weeks, according to traders. The prices of fruits transported from the southern provinces have also remained almost unchanged, and some types of fruit even tend to increase due to shortages at the end of the season; currently green-skinned grapefruit is priced at 70,000 VND/kg, dragon fruit at 55,000 - 60,000 VND/kg, striped watermelon at 20,000 VND/kg, yellow melon at 40,000 VND/kg... Meanwhile, these are the groups of goods that have increased the most when gasoline prices increased a few months ago. According to the analysis of Mr. Le Van Hung, the owner of a stall specializing in vegetables from Da Lat: “The selling price of vegetables always fluctuates erratically because it depends on many factors such as source of goods, weather, product quality, but gasoline prices still affect the product cost structure. It is unreasonable that gasoline prices have decreased sharply in recent times but vegetable prices remain unchanged. However, we mainly import goods from large agents who transact over the phone. As for the increase or decrease in price, it depends on supply and demand, we have to follow the market, once the supplier has not announced a price reduction, we cannot lower the selling price.”

Previously, every time the price of gasoline increased, transportation fares quickly "raced" to adjust the fares. At the same time, essential goods from flea markets to supermarkets also took advantage of the situation to "follow the trend". And gasoline prices were often mentioned as the number one cause of every price increase by small traders. But when gasoline prices cooled down like now, business owners denied that secret relationship. For example, poultry eggs, in the past 4 months, prices have increased by 2 to 3 times. Small traders all gave the reason that eggs increased following gasoline prices, due to transportation costs from the localities, causing prices to increase. But currently, poultry egg prices are still "still". When asked why they did not reduce prices, sellers said that if the source has not decreased, the sellers have to accept it. For food items such as Hai Hau fragrant rice, Dien Bien fragrant rice, Thai rice, etc., when gasoline increased, they also took the opportunity to increase prices a few times, but when gasoline decreased, they remained "inactive". Ms. Pham Thi Huong, owner of a rice shop on Le Viet Thuat Street (Vinh City) explained: "Currently, the transportation fee for rice from Nam Dinh and Thai Binh to Nghe An is still "stable" compared to July. For a 50 kg bag of rice, the carrier is charging about 20,000 - 25,000 VND. But the delivery agent still quotes the old price, so how can we reduce the price?"

At the supermarket system, besides the promotional programs and gifts attached by the suppliers, it seems that the products still maintain the old prices. According to the purchasing department of Big C supermarket, the prices of products sold at the supermarket when increasing or decreasing must be based on the price adjustment notice board of the suppliers, within 10 - 15 days the new price will be applied. The time when gasoline prices increased continuously from the beginning of the year to the beginning of July 2014 caused transportation businesses to quickly increase service prices. But at present, although gasoline prices have decreased a lot, businesses have not yet considered the option of reducing fares. Discussing this, Mr. Tran Van Thanh, representative of Phuoc Thanh Transport Company said: "Currently, a 5-ton truck carrying normal goods from Hanoi to Vinh City costs about 7 million VND, unchanged from the price at the beginning of the year. If calculated carefully, this type of truck will use more than 12 liters of gasoline to run 100km, each liter will save more than 3,000 VND, traveling from Hanoi about 300km will only save nearly 120,000 VND in gasoline... Therefore, even though the price of gasoline has continuously decreased, if we add up the average of all the times the gasoline price has been adjusted compared to the transportation price, it will be difficult to reduce it". Many opinions say that: If from now until the end of the year, the price of gasoline will decrease further, it will still be difficult for goods to decrease in price, and may even increase due to many reasons such as: seasonal factors, storms, year-end shopping needs...

Ms. Phan Thuy Linh - Vietcombank officer shared: "There was a time when the price of goods increased very high, I asked and the seller said that the price of gasoline increased so the price of goods had to increase. But when the price of gasoline decreased very deeply but the price of goods remained the same, it was a lack of sympathy and sharing between businesses and manufacturers with consumers."

After all, in every gasoline price increase, people are always the last to suffer because the prices of essential goods are immediately affected. It can be seen that the price fluctuations of goods in the "rapid increase, slow decrease" style in the free market - where the circulation of goods accounts for the majority - are still being left open to price control. Ms. Phan Thu Ha - a worker at Hoang Thi Loan Textile Company shared: "Every time gasoline and oil prices increase, workers like us are worried because our daily expenses will increase. Meanwhile, our income remains the same, we have to carefully calculate our spending. In fact, the market fluctuates unreasonably and unfairly...".

To cope with the situation of high commodity prices and an upward trend at the end of the year, consumers have no choice but to limit spending. This leads to a decrease in market purchasing power, negatively affecting production and business. Meanwhile, the Ministry of Industry and Trade and the Ministry of Finance both believe that, apart from some input fuels such as electricity, gas, and gasoline regulated by the State, the prices of all goods and services follow market trends, so there cannot be an administrative order requiring price reduction. According to Mr. Nguyen Van Thang - Deputy Head of Nghe An Market Management Department: "The market management force only has the function of inspecting, monitoring and handling violations of price posting and selling at the correct listed price, commercial fraud, but does not have the authority to handle and regulate prices in the market" ...

Gasoline is considered one of the main commodities, accompanying the daily life of people, so after each price increase, consumers are confused and worried. And after each time the price of gasoline decreases, people expect the price of goods to decrease accordingly. However, this problem is considered unlikely to happen when the prices of goods on the market are mainly decided by private traders and there is no competent authority to act as an "arbitrator" and manage this activity.

Article and photos:Ngoc Anh