On May 5, in the wake of increasing global prices, petroleum prices went up by VND2,000 per litre. A litre of the most popular fuel, RON 92, now costs VND19,200 (US$0.89).

Analysts said the price hike, the highest in four years, directly affected transport companies, particularly taxi services, while other industries would be impacted indirectly though no less badly.

Taxi firms in major cities like Ha Noi and HCM City plan to increase fares as a result.

Ta Long Hy, chairman of the HCM City Taxi Association, said many members were keen to hike fares by VND500 -1,000 per kilometre.

Do Quoc Binh, his Ha Noi counterpart, said most taxi companies had asked to adjust their fares soon after the Government decided to increase fuel prices.

Truong Quoc Hung, general director of the capital-based Taxi Vic Company, concurred, saying his company was ready to hike fares.

Binh said his association was considering global fuel price trends and it would spell out its proposal based on this.

"If fuel prices continue to rise it is necessary to increase the fares," he told Nguoi Lao Dong (Labourer) newspaper.

Other industries are also worried, fearing the higher fuel costs would badly affect their business.

Nguyen Van Loc, general director of the Bien Hoa Sugar Company, said transport costs accounted for 15-20 per cent of sugarcane prices and 5 per cent of sugar prices.

So, if transporters increased their rates, the production costs of sugar products would go up, affecting their competitiveness, he said.

Many steel firms have also expressed concern.

"The Government's crackdown on overloading of vehicles has caused steel firms' transport costs to increase sharply," a representative of a steel company in HCM City, said.

"If the transport rates increase, steel companies would face more difficulties."

Truong Thuy Lien, director of the Lien Phat Shoe Company, said it was lucky that only petrol prices had been hiked but not diesel prices, making things a little less difficult for his company.

"However, the cost of many inputs will likely rise due to the petrol price hikes."

Ly Thanh Sinh, director of children's clothes maker Minh Long Hung Company, said: "In the past we had to spend at least VND100 million (over $4,500) on fuel costs for our distribution network. Now, the amount of money for this task is likely to increase sharply since petrol prices were raised by nearlyVND2,000 per litre." 

VNS