Retail petrol prices continued to rise by nearly VND1,000 per litre from February 21 following the latest adjustment by the Vietnamese Ministry of Industry and Trade and the Ministry of Finance. This is the fourth consecutive increase of petrol prices in 2022 and the fifth in a row, with total increase of nearly VND3,500 per litre.

The continuous increase in gasoline prices over the past time will affect production and business activities of enterprises. People shop at a downtown supermarket in Da Nang. Photo: KHANH HOA

Many businesses are now very worried that the continuously increasing petrol price could reduce the effectiveness of restoring production and business activities as well as fiscal policies to stimulate consumption demand and speed up economic growth.

Mr. Mai Van Quang, the Chairman of the Board of Directors of ASIATRANS Viet Nam Joint Stock Company operating in the field of freight transport said that the cost of gasoline and oil accounted for 30 - 40% of the total expenses this transport company must cover, so the hike will strongly affect its operation, especially the freight rate.

Similarly, Mr. Nguyen Van Chin, the Director of Bac Dau Co., Ltd operating in the field of seafood processing said that, since the Tet break, the source of seafood processing materials has not really recovered. In another trouble, the sudden increase in gasoline and oil also makes fishermen hesitate to head out to sea due to fears over potential losses.

Meanwhile, thanks to the anticipation of a hike in the price of raw materials as well as gasoline and oil, the production and export situation at the Da Nang Rubber Joint Stock Company remains stable, although the impact of the petrol price hike is inevitable.

In the retail sector, although the increase in gasoline prices has yet to cause a change in the retail prices of goods, according to Mr. Phan Thong, the Director of Co.opmart Da Nang. However, if there are continuous fluctuations in gasoline prices, commodity prices may inch up as initially anticipated.

Through recent market research, it is realised that production and business activities of domestic enterprises are still highly dependent on imported raw materials from outside.

In reality, the increase in the world prices of gasoline and oil will push up the prices of imported and domestic raw materials. This shows that gasoline and oil products account for a relatively high proportion and have a strong impact on the cost of production steps, and finally, consumption products.

In particular, the rise in gasoline and oil prices has a very strong impact on fuel-intensive industries such as fisheries, freight and passenger transport by roadways, waterways and airways.

Besides, the hike may increase the cost of products and reduce the competitiveness of domestically - produced goods as well, thus affecting the local economic growth.

According to recent-collected data released by the Da Nang Statistics Office, in January 2022, because gasoline and oil prices were adjusted according to the world petrol and oil prices on January 11 and 21 made the price index of fuel groups (gasoline and lubricants and diesel) go up by 2.69% and kerosene by 2.92%.

This was also the cause that directly affected the price of transportation services, at the same time, imposing spillover effects on other commodity groups. The petrol rise also made the consumer price index (CPI) in Da Nang in January 2022 climb up by 0.23% as compared to the previous month and by 0.53% compared to January 2021.

In the face of the continuous increase in gasoline and oil prices over the past time, many businesses have urged functional sectors to take an effective solution to ensure an adequate supply of gasoline and oil in the long term, because if the price rises too high, it will affect the supply of gasoline and oil products, thus affecting the economic recovery and growth.

“In the short term, it is necessary to strictly implement the effective, reasonable adjustments to domestic gasoline and oil prices in line with global fluctuations. On the other hand, it is a need to ensure the domestic supplies of gasoline and oil to the market so as to ensure energy stability and security as well as to have flexible adaptation to the changes in world gasoline and oil prices”, said Pham Bac Binh, Chairman of the Da Nang Small and Medium-sized Business Association.

Reporting by HOANG LINH – Translating by A.THU