return icon Vietnamnet.vn

VN transport firms hit by fuel price hikes

The fuel price has been increasing over the last two months, dealing another blow to transport firms that have not recovered from Covid-19.

{keywords}

 

Nguyen Anh Cuong, the owner of a transport firm providing services on Son La - Hanoi route, said the expenses on fuel account for 40 percent of transportation costs.

The fuel price is on the rise, while the number of passengers is on the decrease, which has caused big losses. He estimated that the fuel alone costs VND10 million for one return trip, but there are less than 20 passengers. With the ticket price of VND250,000, he has to make up for the loss of nearly VND2 million a day, which means VND10 million for five buses. The company is operating at just 50 percent of capacity and 50 percent of staff.

Some passenger transport companies at Giap Bat Station in Hanoi also say they are running at a moderate level after the fuel price increases.

Vu Hoang, the owner of a company providing service on Hanoi – HCM City route, said because of the pandemic, the number of passengers has dropped dramatically, while input costs have kept increasing. He hopes to earn VND5 million for each trip. He breaks even for some trips but receives a lot from others. If the situation does not improve, he will consider stopping operation for a while.

According to Hai Duong provincial authorities, the frequency of internal and inter-province buses is just 20 percent of the normal period. Taxi firms have also been dealt another strong blow because of the fuel price hike.

With a modest number of passengers, unprofitable transport firms may have to downsize their staff.

The owners of some transport firms at Mien Dong Station in HCM City said they have to make up for losses of the company with their own money. The firms now operate with 25-50 percent of capacity compared with the time before the pandemic.

The HCM City Cargo Transportation Association confirmed that the fuel price has reached a 7-year high and is predicted to keep increasing.

For container vehicles and heavy trucks, fuel costs account for 35-40 percent of total costs, while the figure is 25 percent for other kinds of vehicles. Meanwhile, transport firms have to pay many types of fees, including parking and road maintenance fees.

Easing tax burden

Bui Danh Lien, Chair of the Hanoi Transport Association, said fuel costs, especially transportation services, are a big part of companies’ costs.

In order to ease difficulties, transport firms have cut unnecessary expenses and asked drivers to save fuel. However, if the fuel price continues increasing, they will have to raise the freight rates to ensure normal operation. The adjustment may be 5-7 percent. If so, they may even face bigger difficulties because of the decrease in number of passengers.

To help transport firms overcome the difficulties, the Ministry of Finance (MOF) has proposed the reduction of the environmental protection tax by VND1,000 for every liter of petrol and VND500 for every liter or kilogram of oil, from April 1 to the end of 2022.

According to the ministry, the environmental protection tax cuts for petrol, oil and lubricants will help the petrol price decrease by VND1,100 per liter and oil prices by VND550.

Meanwhile, the Vietnam Chamber of Commerce and Industry (VCCI) has proposed shaper tax cuts, VND2,000 for every liter of petrol and VND1,000 for every liter of oil and lubricants, for three to six months.

According to VCCI, the fuel price has reached its peak, so support from the State is extremely important amid the pale economy. It stressed that the solution is feasible as Vietnam is getting benefits from crude oil price increases and satisfactory budget collections in the first two months of 2022.

Pham The Anh from Hanoi National Economics University said the environmental protection tax could be reduced to VND3,000 per liter from the VND4,000 per liter. Also, the product could be added to the list of the products receiving VAT reductions of 2 percent like other kinds of goods.

The tax cuts won’t affect long-term sources of revenue, while they will have a direct impact on petrol prices, thus helping curb goods price increases.

It is estimated that the tax proportion of the petrol price is 40 percent, which is a burden on Vietnamese people who have low income. China has income per capita three times higher than Vietnam, but its petrol price is the same as Vietnam. 

Tran Thuy

Petroleum supply faces tough challenges

Petroleum supply faces tough challenges

The Ministry of Industry and Trade (MoIT) has instructed agencies to ensure the supply of petrol amid tight supply.

Fuel price climbs to new high, Finance Ministry wants to amend environment protection law

Fuel price climbs to new high, Finance Ministry wants to amend environment protection law

The Ministry of Industry and Trade (MOIT) and Ministry of Finance (MOF) have raised the ceiling fuel prices for the March 1 review. This is the third consecutive price increase in the Year of the Tiger.

MORE NEWS

Hanoi to turn middle alluvium ground into park

One more park has been designed for Hanoians. However, it is still unclear when the project will appear, as a number of other projects are still on paper or pending.

Asian investors eye more M&A opportunities in Vietnam

Investors from Japan, the Republic of Korea (RoK), and Singapore are looking for more potential merger and acquisition (M&A) opportunities in Vietnam, pinning high hopes on the long-term growth prospects of the market.

Vietnam's fishery exports exceed 10 billion USD in 11 months

Fishery exports reeled in 10.14 billion USD as of November this year, up 27% annually, said the Ministry of Agriculture and Rural Development.

HCM City want foreign doctors to be fluent in Vietnamese

The HCM City Department of Health has just proposed that foreign doctors should be fluent in Vietnamese if they want to work in the country.

Use of toxic e-cigarettes among students on the rise

After a trial smoke, T lost consciousness, was foaming at the mouth, and his limbs were curled up. Two days later, T regained consciousness at the hospital, but was still in the status of extreme fear.

Vietnam spends US$7.74 billion importing petroleum products

Vietnam imported over 7.5 million tonnes of oil and petrol worth around US$7.74 billion as of mid-November, up 24.1% in volume and 122% in value year on year, according to the General Department of Vietnam Customs.

Vietnam won’t sacrifice the environment for economic growth: Prime Minister

Vietnam takes people as the goal in development. People will enjoy the fruits of a green economy and the government will not sacrifice the environment to pursue economic growth.

Vietnam’s bond market contracts amid monetary tightening

After strong growth in the previous quarter, Vietnam’s currency bond market contracted 0.2% due to a decline in the Government bond market and slower growth in corporate bonds.

AI used to predict renewable-energy capacity

Wind and solar power will account for an increasing proportion of Vietnam’s total electricity capacity.

Infrastructure pinpointed to spur socioeconomic fortunes

The Vietnamese government is continuing to promote infrastructure development with the construction of expressways and new bridges, in efforts to spur socioeconomic development and welcome new private investment.

Budget resolutions set plan for 2023

Vietnam’s state budget performance is expected to see a deficit of billions of US dollars this year, with such a landscape fixed for next year – with warnings sounded about punishing violations in budget management and usage.

Vietnam fruit exported to new markets

2022 has been a successful export year as Vietnam’s farm produce has accessed many international markets.

Colourful beauty of Lo Lo ethnic costumes

Living at the foot of Rong (Dragon) Mountain in Lung Cu Commune, Dong Van District, Ha Giang Province, the Lo Lo ethnic community have effectively preserved their traditional culture, including their attire.

Sapa forecasted to experience frost

Mount Fansipan in the northern province of Lao Cai’s Sapa Town has been forecasted to see frost in the coming days as temperatures fall below zero degrees centigrade.

Dortmund footballers excited to discover Hanoi

Following their arrival in Hanoi, players of Bundesliga FC Borussia Dortmund enjoyed a cyclo tour around the Vietnamese capital and explored some famous sightseeing spots ahead of their friendly match against hosts Vietnam on November 30.
back_to_top