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Vietnam: Ministry Holds Line on Transportation Costs
Source: vietnamnews.vnagency.com.vn
Source Date: Monday, October 22, 2012
Country: Viet Nam
Created: Oct 23, 2012

The Finance Ministry has asked city and provincial authorities to prepare price management plans for transportation services in their localities to prevent any "unreasonable" hikes that can hurt consumers.

The instruction comes as rising world prices push domestic fuel suppliers to increase prices. The latest increase last Monday, saw petrol prices rise by VND1,100 per litre and that of other fuels by VND500 to VND800 per litre. It is the third hike in fuel prices in less than a month.

The Ministry has urged localities to set reasonable prices for transport services, based on "input" prices or prices of other services and commodities in the local market.

Transport companies should not be allowed to take advantage of fuel price hikes to increase their prices unreasonably, the ministry reiterated.

City and provincial authorities have also been asked to ensure that enterprises in their localities, especially those that consume large volumes of fuel, better manage their production costs so as to prevent very sharp increases in the prices of their products and services.

Local authorities have to strengthen the management, control and inspection of the registration, listing and quoting of prices, especially for essential goods such as dairy products, pharmaceuticals, gas, transportation services, food and foodstuff, the ministry said in a statement on its website.

No choice
After the fuel price hikes, transportation firms have held urgent meetings to discuss prices.

Thai Van Chung, Secretary of the HCM City Transportation Association, said transportation fees were affected by many different input factors, including fuel costs, interest rates and material costs, with the aforementioned having the most substantial impact.

He said goods transport firms mostly used diesel, not petrol, and the price hike of VND500-800 per litre for oil is quite high, so they had no choice but to consider increasing transportation fees.

However, the rate of increase would vary between companies, he said.

The Mai Linh Group, for instance, has decided to amend tariffs in different areas in 53 cities and provinces that it operates.

Mai Linh Corporation, a taxi company with 6,000 cars operating nationwide, has increased prices between VND800-1,000 ($0.03-0.05) per kilometre depending on the type of car. Currently, the price of a four-seat cab ranges from VND10,000-14,300 ($0.47-0.68) per kilometre, and a seven-seat car is from VND13,400-17,000 ($0.63-0.8).

Vinasun Corporation with a fleet of 4,500 cars has upped fares by VND500 ($0.023) per kilometre for all of its cabs in HCM City.

In Ha Noi, taxi fares have yet to change, but some taxi firms have proposed increasing their fares between VND500-1,000 per kilometre, according to the city's Taxi Association.

Bui Danh Lien, Chairman of Ha Noi Transportation Association, said taxi fares would be raised soon and the minimum increase would be five per cent.

Petrol and gas prices have gone up three times in less than a month. The price increased by VND300-400 per litre in July and between VND500-900 per litre in August. This is also the fifth increase in 2012, marking a VND5,400 per litre hike in petrol since the start of the year.
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