[International] Vietnam's Fuel Prices Soar 20% in 3 Months, Inflation Felt; Taiwanese Businesses Lament Rising Labor and Transportation Costs
RtiTalk 小編18d ago
Vietnam's fuel prices have cumulatively increased by over 20% in the past three months, driving up production, transportation, and commodity costs, exacerbating inflationary pressures. The average consumer price index for the first eight months of this year also rose by more than 4% compared to the same period last year. Taiwanese business owners told CNA that labor costs alone have increased by over 10%, with transportation fees and quotation frequencies also rising significantly.
According to a report by Vietnam News Agency on the 1st, in the past month or so, gasoline prices in Vietnam have risen for the fifth consecutive time, and diesel prices have also increased for the third consecutive time, adding to the costs for various industries, from agriculture, animal husbandry, and fisheries to factories and transportation operators.
Vietnamese media reported that by the end of September, the price of 92 unleaded gasoline had risen to 26,397 Vietnamese dong per liter (approximately NT$32.33), 95 unleaded gasoline to 27,087 Vietnamese dong per liter, and diesel to 30,047 Vietnamese dong per liter.
According to GlobalPetrolPrices, gasoline prices, under strong government intervention at the time, fell to a recent low in late June at around 20,126 Vietnamese dong per liter, and have been rising since. By the end of July, it rose to 22,388 Vietnamese dong per liter, and now it has increased to 26,397 Vietnamese dong per liter, with gasoline prices accumulating over 20% in the past three months. After the latest price adjustment on October 1st, diesel prices saw their first recent decrease, now at 29,710 Vietnamese dong per liter.
The Hanoi Small and Medium Enterprise Association told Vietnam News Agency that rising gasoline prices have put pressure on manufacturing, trade, and import-export businesses.
The association stated that for exporters, rising gasoline prices increase transportation costs, including container freight, domestic shipping, insurance, and other related fees. Since businesses typically agree on prices before goods are delivered, increased costs during the contract period squeeze profit margins.
Zhu Guiliang, General Manager of Hongtai International Logistics Hanoi Branch, told CNA in a phone interview on the 3rd that the fuel subsidy for office staff commuting alone has increased by 12% to 15%. In addition to labor costs, electricity prices have also been adjusted once last year and once this year.
He said that due to the surge in international oil prices, emergency fuel surcharges are being applied, which are additional fees temporarily levied by transportation carriers to cope with sudden and significant increases in international fuel prices.
Zhu Guiliang pointed out, "Previously, we negotiated freight rates with some airlines on a quarterly or monthly basis, but now it's adjusted weekly, which greatly reduces our work efficiency, requiring constant rapid responses and re-invoicing clients."
For customers, "The oil price increase is causing sea freight costs to rise by more than 20% and air freight by almost 30%, but ultimately, the end customer has to bear it."
Consequently, prices continue to rise. The General Statistics Office stated that the consumer price index in August increased by 0.47% quarter-on-quarter, mainly due to the rise in international oil prices.
Vietnamese media reported that the average consumer price for the first eight months of this year increased by 4.45% compared to the same period last year. Prices for housing, electricity, water, fuel, and construction materials rose by 6.71%, transportation costs by 5.38%, and food and catering services by 4.76%.
Military Bank Securities Company (MBS) in Vietnam stated that affected by rising global oil prices, increasing construction costs, and domestic economic factors, Vietnam is likely to continue facing inflationary pressures in the last four months of this year. MBS predicts the average consumer price inflation rate for the year to be between 4% and 4.5%, with the third-quarter GDP growth rate at 8.7% to 9%.
MBS said that as a net energy importer, Vietnam is susceptible to global oil price fluctuations, which drive up domestic fuel prices. Furthermore, due to demand for infrastructure and housing development, construction material prices are also expected to rise, with steel prices projected to increase by 7% compared to the same period last year.
MBS stated that as a net energy importer, Vietnam is susceptible to global oil price impacts and continues to face inflationary pressures, predicting an average consumer price inflation rate of 4% to 4.5% this year. Pictured is a traditional market in Vietnam. (Photo: CNA)
Shi Guofeng, who has been operating the premium coffee brand KOK in Vietnam for many years, told CNA that transportation costs and packaging raw materials saw significant increases last year. While he hasn't received any price increase notices yet, "given the recent large fluctuations in oil prices, any impact is expected by the end of the year."
On the 1st, the government announced an extension of tax cuts on gasoline and diesel for another three months. In response, Nguyen Huu Anh, Director of the Macroeconomic Research Program at the Center for Smart Green Transformation, Vietnam University, told Vietnam News Agency that although the Vietnamese government used its stabilization fund to curb fuel price hikes in previous months, such intervention space will become increasingly limited with continuously rising global oil prices.
He stated that the recent increase in gasoline prices has significantly exacerbated inflationary pressures, and without appropriate policies, the inflation rate by the end of the year could exceed the government's target of 4.5%.
Given the limited policy space, he suggested that the government should avoid large-scale gasoline price subsidies and instead adopt targeted measures, prioritizing diesel, which is used in large-scale logistics and machinery production.
Source Link: https://www.rti.org.tw/news?uid=3&pid=235578
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