Transport enterprises live together with the price storm of fuel


Many transport businesses are having to make up for losses when gasoline prices increase and customers are absent. Photo: Quang Minh
Many transport businesses are having to make up for losses when gasoline prices increase and customers are absent. Photo: Quang Minh

The transport industry faces difficulties

According to the Ho Chi Minh City Cargo Transport Association, the price of gasoline has increased to the highest level in the past seven years and may continue to increase, causing many difficulties for transport enterprises.

In particular, for container trucks and heavy trucks, fuel costs account for about 35-40%, while other vehicles account for about 25% on average. In addition, businesses also have to pay other costs such as wharf, road maintenance fees, BOT causing enterprises to face many difficulties.

Not only being affected by the Covid-19 pandemic, which caused a sharp drop in passenger numbers, recently many transport enterprises continue to face difficulties when fuel prices increase.

Bui Thi Huy Vien, owner of Tu Vien bus company running on the Ho Chi Minh City – Quang Ninh route, said that she has been standing still for almost two months now when the price of gasoline keeps escalating while the number of passengers is decreasing.

In a short time, Vien had to sell two passenger cars to pay off bank loans and cover losses. The frequency of passenger buses leaving the station must also be reduced.

Similarly, Ho Thi Thu Phuong, Phuong Sa bus operator running the Mien Dong bus station (HCMC) – Vung Tau route, said that the gasoline prices are too high while there are no customers, making it increasingly difficult for transport businesses.

According to Phuong, before the pandemic, there were more than 10 cars in operation, after the service, the number of passengers decreased to only four and now only two are left. The cost of petrol and the driver’s salary for each leg is about VND2 million, but sometimes there is only one customer.

The domestic logistics transportation sector is also facing a lot of pressure when gasoline prices are high. A representative of Quang Chau Transport Joint Stock Company (HCMC) said that this unit has more than 200 transport vehicles and containers with more than 180 drivers lying in the yard.

Freight activities are currently only maintained in moderation to fulfill previously signed contracts with partners because the more businesses run, the more they lose.

Le Thanh Thao, a representative of Quang Chau Transport Joint Stock Company, said that the price of gasoline has increased, but the route to adjust transportation charges must be carefully considered, especially in this period, the amount of goods is very low.

The adjustment of freight rates is only a matter of time to reduce losses, but how to adjust to maintain stability and competition is a problem.

Difficult to increase ticket prices

In addition, according to experts, the bigger risk is that the prolonged increase in gasoline prices will create a new high level of freight rates.

According to business rules, high freight rates will last long and the impact on prices of consumer goods will be at a correspondingly high level. Fuel price increases are becoming the key foundation to creating a new price level for all costs and goods in society.

Ta Long Hy, Chairman of the Ho Chi Minh City Taxi Association, said that the high gasoline prices put great pressure on taxi companies. Currently, businesses are “stretching” to cope, however, if the Government does not adjust to reduce gasoline prices in the near future, it will force taxi businesses to increase fares. At that time, consumers will be the most affected.

Do Phu Dat, deputy director of Mien Dong bus station, said that up to now, 20 bus operators have proposed to increase ticket prices, the average increase rate is 26%.

According to Dat, in passenger transport activities, gasoline prices account for about 20-30% of the fare structure. From the beginning of 2022 until now, gasoline has continuously increased by about 6%, meanwhile, the number of passengers has decreased by about 40%-50% compared to the same period in previous years, leading to many difficulties for businesses, so they are forced to adjust.

Similarly, many businesses at Mien Tay bus station (Binh Tan district, Ho Chi Minh City) have also sent declarations to increase ticket prices to the authorities. Tran Van Phuong, Deputy Director of Mien Tay Bus Station, said that after enterprises declare their fare adjustment, the unit will send it to the Department of Transport of the provinces and cities, when it is accepted, the new bus operators can increase the price and list it at ticket counters.

On the basis of the report of the Ministry of Finance, on the afternoon of March 23, the National Assembly Standing Committee approved a resolution on the environmental protection tax rate for gasoline, oil and grease until the end of December 31.

Accordingly, the environmental protection tax rate for gasoline, oil and grease from the effective date of the Resolution (from April 1, 2022) to the end of December 31, 2022 is: Gasoline will be reduced by VND2,000/liter, from VND4,000/liter to VND2,000/liter. Diesel, fuel oil and lubricating oil reduced by VND1,000/liter, from VND2,000/liter to VND1,000/liter. Lubricant reduced by VND1,000/kg, from VND2,000/kg to VND1,000/kg. Kerosene decreased by VND700/liter, from VND1,000/liter to the floor level of VND300/liter.

According to the analysis of the Ministry of Finance, petroleum is both a strategic, important and essential commodity that has a strong impact on production and business activities of enterprises and people’s lives and directly impacts macroeconomic stability.

The increase in gasoline prices will put great pressure on production and business costs of enterprises as well as consumer spending; in the context of the Covid-19 pandemic, it is necessary to have management solutions to stabilize the domestic petroleum market.

Evaluating this solution, many businesses think that this is a positive move from state management agencies to help businesses. However, if the situation of oil prices continues to increase, a stronger environmental tax reduction will be needed to help cool down domestic gasoline prices.


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