VietNamNet Bridge – Transport services would most suffer from the petrol price increase by 1100 dong per liter. Other sectors would also be distressed because of higher input production costs.

Transport service providers threaten to raise service fees

The petrol price increase would immediately have impact on the transport sector, where the expenses on fuel account for up to 50 percent of total costs.

Nguyen Do Phuong, Assistant to the Chair of the Mai Linh taxi group, said Mai Linh had to spend 6 billion dong to adjust the odometers and the service fee posting after the two times of petrol price adjustment in July.

Now as the petrol price has increased again, the taxi group would have to spend more money and time to follow the procedures to adjust the service fees.

“The petrol price has been floating, which means that it would fluctuate all the time. Therefore, we should think of a solution allowing to adjust the service fee in the most flexible and convenient way,” Phuong said.

According to Phuong, the State should fix the official taxi charges and allow taxi firms to collect fuel surcharges. As such, businesses would be able to easily adjust the quoted charges after informing about the adjustment to competent agencies.

Do Xuan Phu, Director of the Minh Lien Transport Company, has affirmed that cargo transport service providers would certainly raise the charges, since the petrol price has increased sharply by 1100 dong per liter.

Also according to Phu, the contracts signed with the clients included a provision that the service provider has the right to increase the charges in case the petrol price increases by 1000 dong per liter or more.

Other sectors would be afflicted

Transport would not be the only sufferer from the petrol price increase. Dang Huy Hai, Deputy General Director of the New World Saigon Hotel said that with 60,000 liters of oil used every month, the hotel would have to spend 30-58 million dong more every month (the oil products have increased by 500-800 dong in prices).

Hai said that the petrol price has increased three times since the beginning of the year, which means that the hotel has to pay 100 million dong more a month for oil in total.

The electricity, water and oil price increases alone have made the input costs increase by seven percent. The food prices and other expenses have all also increased, while the hotel room rate has increased by five percent only and the room occupancy has decreased by five percent.

“Higher input costs, fewer guests have both caused a big headache to us,” he said.

A senior executive of CP Vietnam said the company did not receive any notices about the transport service fee increases in July, after the petrol price was raised two times. However, the sharp price hike of 1100 dong per liter this time would force transport firms to increase fees.

Fishermen are considering selling some boats and only going fishing near the shore to cut down expenses. Pham Thanh Nhan, Director of Mai Loi Enterprise, specializing in fishing cuttlefish in Ben Tre province, said his 42 boats, which consume 1000 liters of oil for every trip to the sea, need to bring the turnover of over 35 million dong to make profit.

However, while the fuel price keeps rising, the dried cuttlefish price has been decreasing. In 2011, dried cuttlefish was traded at 330,000 dong per kilo, while it has dropped to 300,000 dong.

Steel and cement manufacturers said though the fuel price increase would not have direct impacts on their production. However, they would incur indirect impacts, when they have to pay higher for the transport costs.

Compiled by Thu Uyen