Transport enterprises struggle to endure the battle in the midst of the “storm” of gasoline prices

Mr. Do Van Bang, Vice Chairman of the Hanoi Automobile Transport Association, admitted that transport enterprises are in a difficult situation, if they do not operate, they are at risk of defaulting on their debts.

“Petroleum prices have increased sharply, businesses have been struggling for many days now. If it continues like this, I’m afraid I won’t be able to hold it anymore.” Mr. Bang shared.

Transport enterprises struggled to endure the battle in the midst of a 'storm' of gasoline prices - 1

Passenger transport enterprises are facing difficulties due to high gasoline prices. (Illustration)

Although fuel prices are high, what causes a headache for bus operators is that they cannot immediately increase ticket prices. The reason why businesses want to increase freight rates is that they can. Although the COVID-19 epidemic is under control, people’s travel needs are still very limited. Except for holidays, or weekends, most garages are empty.

“Currently, the company’s fleet of vehicles is only operating at 30%. Many bus trips due to lack of passengers had to be cut off to gather customers. Businesses pull all kinds of things to hope to break even, but if the price of gasoline keeps increasing, I don’t know what will happen.” Mr. Bang added.

A representative of Thai Binh bus company Phiet Hoc said that the current biggest “nightmare” of passenger transport businesses is the high price of gasoline. In order to limit losses, the airline is calculating a plan to increase freight rates but worry about passengers turning away.

“Petroleum accounts for 30-40% of the transportation unit price, so the price increase immediately affects costs. But the difficulty is that businesses cannot immediately increase the fares because each trip only has a few passengers. Most businesses have just been exhausted because of the prolonged COVID-19 epidemic, and now, when fuel prices are high, they will die.” The representative of Phiet Hoc Thai Binh bus said and said that in case there is a fluctuation in fares, the unit always considers it to ensure the benefits from the passengers.

Mr. Nguyen Dam Van, General Director of Van Minh Travel and Tourism Company, also expressed concern that the high petrol price has had a strong impact on operating costs, making businesses more difficult. “The business has a fleet of 30 passenger cars, but now only operates with a third, the rest lies in the yard because there are no customers. Having already lost money because of the COVID-19 epidemic, now the input costs have been increased, so it’s simple. If you have lost, you will continue to lose more and more.”Mr. Van said.

Reduced excise tax to keep gas prices down

According to experts, the world oil price continues to fluctuate complicatedly, in the coming operating periods, the domestic retail price of petrol will be under great pressure to increase prices. In the context that the stabilization fund has been exhausted, the most feasible solution to regulate gasoline prices is to reduce taxes and fees.

Assoc. Prof. Dr. Ngo Tri Long, former director of the Institute for Price Research (Ministry of Finance), said that petroleum products are currently subject to many taxes at the same time. There have been many opinions wondering about the application of both environmental tax and excise tax on gasoline. While gasoline is not a luxury good, it is subject to environmental protection tax, but also has to bear the excise tax.

“The reduction of excise tax on gasoline will certainly help to “cool down” the selling price of this item, reduce inflationary pressure, and avoid having too great an impact on people’s and businesses’ lives,” he said. Mr. Long emphasized.

Similarly, Associate Professor Dinh Trong Thinh, Lecturer at the Academy of Finance, also said that special consumption tax should be balanced. Because this tax should only be levied on harmful goods and services, luxury goods while gasoline is an essential commodity. Moreover, petroleum is also subject to environmental protection tax.

According to Mr. Thinh, the reduction and exemption of taxes calculated on a percentage of the cost will ensure flexibility and the ability to affect macro factors of the economy. In case the revenue from taxes and fixed fees on petrol and oil prices is reduced due to new regulatory policies, it will be partially balanced by revenue from exported crude oil.

On the business side, Mr. Do Van Bang said that at this time, it is advisable to temporarily exempt and reduce special consumption tax on petrol and oil, so as not to let this item continue to escalate. “I think that at this time, it is advisable to temporarily remove the excise tax on gasoline. In fact, if the price of gasoline decreases, businesses will save that dong. In the context of just struggling because of the epidemic, now gasoline is linked to the pandemic. If the business recovers, then it will make up for it later.” Mr. Bang said.

The story of petrol prices was also discussed a lot at the 3rd session of the 15th National Assembly. According to National Assembly deputy Le Thanh Van, recently, gasoline prices increased due to the conflict between Russia and Ukraine, leading to global geopolitical fluctuations and supply disruptions. Petroleum is not inherently scarce, but due to fracture, in a certain period, goods are not delivered to consumers. Therefore, gasoline prices are pushed up, negatively affecting production activities, people’s daily life, and may lead to concerns about inflation.

“Sustainability in growth is very important. The ability to control inflation below 4% is difficult according to the set target. Therefore, we must take into account the scenarios where the indicators are adjusted, including the targets. inflationary”, Mr. Van said.

NA delegate Nguyen Thi Suu (Deputy Head of the National Assembly Delegation in charge of Thua Thien – Hue province) said that the current galloping increase in gasoline prices will have a strong impact on the Vietnamese economy, so it is necessary effective solutions to reduce.

“The most important are input costs and inflation control. Currently, there is still room to control gasoline prices, but there is a trade-off between reducing budget revenue and controlling the increase in gasoline prices.” Mrs. Suu said.

From there, Ms. Suu stated that it is necessary to reduce some of the fees that make up the price of gasoline. For example, the excise tax on gasoline must be calculated to reduce, but how to reduce it to balance revenue and expenditure is a matter of careful consideration.

“In order to have room to reduce with gasoline, I think it is necessary to calculate the increase in excise tax collection for a number of service industries, tourism, restaurants, hotels, entertainment activities, because these industries is back in action”, suggested by Mrs. Su.

Talking to the press on the corridor of the National Assembly on May 24, Minister of Industry and Trade Nguyen Hong Dien affirmed:There is never a shortage of fuel supply“. Mr. Dien also said that the domestic petrol price is linked with the world petrol price, so it is necessary to closely monitor the movements of the world petrol price. However, he emphasized:Rest assured, there is always a tool to cool down the price of gasoline“.

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