Illustrative image (Source: VNA)Hanoi (VNS/VNA) - Thepetrol retail price saw its highest surge so far this year on Saturday, raisingconcerns over unpredictable impacts to the economy and the possible increase ofgoods prices during the upcoming Tet (Lunar New Year) holidays, experts said.
The Ministry of Industry andTrade and the Ministry of Finance raised the retail price of biofuel E5 RON 92by 675 VND to 20,906 VND per litre.
The price of RON 95 also rose by 577VND to 22,347 VND per litre, while the prices of diesel and kerosene went up by485 VND and 403 VND to 18,611 VND and 17,086 VND per litre, respectively. Theprice of mazut increased by 752 VND to 15,964 VND per kilo.
According to the ministries,global oil and petrol prices surged to 90.63 USD a barrel in the past 15 days.If the price of crude oil climbs to 100 USD a barrel by the end of this year,the country will have to consider action to stabilise prices.
Earlier this year, the NationalAssembly approved important goals such as growth rate and inflation based onthe scenario of the crude oil price staying at 50 USD a barrel. The surgingprice in the world market will thus certainly affect the economy.
On the positive side, rising oilprices will increase revenue for the State budget through the sale of crudeoil. However, the benefits from the sale of crude oil to the economy at thistime are not as great as before 2014 because the Government has taken intoaccount sustainable growth scenarios independent of oil prices.
In fact, crude oil production isfalling, from 17.23 million tonnes in 2016 to 15.52 million tonnes in 2017.
However, former head of theCentral Institute for Economic Management Dr Le Dang Doanh said the mostdaunting impact was the pressure to increase domestic retail prices, therebyreducing competitiveness, threatening inflation in the economy and causingpeople’s actual income to fall.
Nguyen Duc Do from the Academy ofFinance said the CPI would be under control and remain less than 4 per cent, asset by the National Assembly.
However, rising petroleum priceswould have a direct impact on people’s spending, causing inflationary pressuresthrough 2019.
Experts said some products suchas food, cosmetics and packages saw a price increase before the petrol pricehike due to the increasing input of labour cost, material and exchange rate.There would be a new surge in the future because of the petrol hike.
Le Thi Thanh Lam, deputy generaldirector of Sai Gon Food JSC, was quoted by Laodong (Labour) Newspaper, saying that their company has striven tokeep their products’ prices stable. However, they will have to increase theirprices for the upcoming Tet holiday.
The continuous increase in petrolprices would not only affect the cost of transportation, but also increase theinput costs. Manufacturers are worried that prices have been locked in for the Tet holiday but that they could applyfor adjustments in early March 2019. However, the company must consider onlyreasonable increases because the price increases always accompanied withpurchasing power reduction, Lam said.
Thorakao said they had toincrease their selling price starting on September 5. Huynh Ky Tran, Thorakao’schairman, said the company had to keep their price unchanged for somewholesalers to maintain their market share.-VNS/VNA
VNA
