Transport fares on hold despite fuel price cuts

Monday, Jan 05, 2015 08:21

Customers choose food at the Big C Supermarket in Ha Noi's Cau Giay District. Transport rates have not fallen along with fuel costs, so food prices are likely to stay the same as Tet approaches. — VNS Photo Thai Ha

HA NOI (Biz Hub) — Transport rates have not fallen along with fuel costs, so vendors cannot lower prices for products and services as Tet approaches, according to Thu Duc Market deputy director Nguyen Thanh Ha.

Businesses participating in the Tet price stabilisation programme such as Vissan said lower fuel costs had only a slight effect on rates, as the major costs were still electricity and inputs.

Meanwhile, leaders of transport companies and associations complained that they were having trouble with rate reduction procedures.

Chairman of Da Nang Road Transport Association To Van Hiep said fuel was not the major cost for all products and services, adding that vendors were responsible for cutting prices, not transport companies.

Ha Noi Transport Association chairman Bui Danh Lien told Phap Luat va Doi Song (Law & Life) that his association sent a request to transport companies on December 25 asking them to reduce rates by January 15.

However, transport rates depended on more factors than fuel cost and changing the rates cost a lot of time and effort, according to Lien.

Nguyen Xun Thuy, former director of Transport Publishing House, said that transport companies would make large profits from maintaining rates while fuel costs declined.

He urged government agencies to take serious action against enterprises that delayed reducing rates.

Ngo Tri Long, former Director of Institute for Price Studies under Ministry of Finance, said that by delaying rate reductions, transport companies were violating the market economy rule and losing consumers' confidence.

Recently, the Ministry of Finance sent a request to the Ministry of Transport as well as province and city People's Committees to tighten control over transport companies reducing their rates to match fuel cost reductions.

The Ministry of Finance suggested fining companies that did not reduce their rates VND 5 million-30 million (US$240 to $1430). However, the specific procedures, deadlines and reduction amounts differed between provinces. — VNS

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