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

Vietnam among top 10 best places to go for budget honeymoon

The nation has been listed among the top 10 best places to go for a budget honeymoon in 2023 by prestigious global travel website Lonely Planet.

Vietnam’s industrial production to rise 6.6% in 2023: S&P Global

Vietnam is predicted to record a rise of 6.6% in industrial production in 2023, according to S&P Global Market Intelligence.

Vietnamese athletes to receive 1 mln USD for Paris Olympic gold

Vietnamese athletes competing in the Paris 2024 Summer Olympics, scheduled for July 26 to August 11, 2024, will receive 1 million USD in bonus for each gold medal; 500,000 USD for silver and 200,000 for bronze.

VIETNAM NEWS HEADLINES FEBRUARY 1/2023

Party chief’s book on corruption fight to make debut

Google Doodle honours first female Vietnamese newspaper editor Suong Nguyet Anh

The world’s most popular search engine Google has paid tribute to Suong Nguyet Anh, the first female editor of the nation’s first women’s newspaper by posting a drawing of her on its homepage on February 1.

Banh Cuon among world top 10 dishes visitors should try in 2023

Australian travel magazine Traveller has listed Banh Cuon, Vietnamese steamed rice rolls, among the top 10 best meals from around the world that visitors should try in 2023.

Party chief directs key tasks for new year

Party Secretary Nguyen Phu Trong on Tuesday chaired a meeting of the Secretariat of the Communist Party of Vietnam (CPV) Central Committee, mapping out key tasks for the new year.

VIETNAM BUSINESS NEWS FEBRUARY 1/2023

Domestic market to drive tourism recovery in 2023: insider

Some big companies made profits in 2022, but others incurred losses

While Duc Giang Chemicals and Binh Son Refining and Petrochemical have reported big profits for Q4 and the year 2022, Vietnam Airlines and leading steel manufacturer Hoa Phat saw big losses for the year.

Vietnamese couple help German bicyclist in distress

Trung and Nhung, a Vietnamese couple, on the way to travel across Vietnam on Tet holiday, saw a foreigner who was facing troubles because of strong winds in Ninh Thuan.

Vietnam develops green agriculture to increase exports to EU

Vietnam is paying attention to mobilising resources to invest in developing green agriculture with an aim to raising the market share of its agricultural exports to the European Union.

Vietnamese team comes first at Southeast Asian Fencing Championship

Vietnam secured the first position at the 2023 Southeast Asian Fencing Championship which has taken place recently in Malaysia.

2023 - Time for Edtech to thrive in Vietnam

Experts are positive about the development of Vietnam’s education technology (Edtech) market in 2023 if local Edtech companies can overcome post-pandemic challenges.

UK imports from Vietnam in 2022 put at over US$6 billion

United Kingdom (UK) imports from Vietnam amounted to US$6.06 billion last year, rising by 5.2% over 2021, according to the General Department of Vietnam Customs.

Five more registration officials in Hanoi prosecuted for soliciting bribes

Police of Hanoi’s Thuong Tin District has started legal proceedings against five officials at 2915D Registration Centre for taking bribes.
back_to_top