Finding solutions so commodity prices no longer anchor when gasoline prices decrease


Finding solutions so commodity prices no longer
The seminar “Petroleum prices decrease, prices of goods do not decrease – Current situation and solutions” was held by the Government Portal

Market prices lag

In the past, the price of petrol and oil decreased many times in a row. The current petrol and oil prices are equivalent to January 2022. However, up to the present time, the prices of many essential commodities in the country have remained at a high level. This includes pork, passenger freight, freight, and food, which negatively affect people’s lives, especially during the period when the whole country is trying to recover the economy after the pandemic in the past 2 years.

Explaining this issue, Mrs. Dinh Thi Nuong, Deputy Director of the Price Management Department (Ministry of Finance) said that due to the impact of petrol prices on some commodities, it takes time to adjust the price. Production and business units, especially those whose products are directly affected by petrol and oil prices, must review the cost factors of price formation and determine the reduced selling price in line with the recent drop in petrol prices.

Agreeing with the leaders of the Price Management Department about the cycle and lag of prices in the market, economist Can Van Luc said that there were also a number of other reasons. Assuming enterprises immediately reduce the price of other related products, they are afraid that it will be extremely difficult to increase it later.

“I think it’s cautious but not convincing enough because it’s clear that “the water goes up, the boat goes up, the water goes down, the boat goes down”. I agree there is a delay, but it can’t be months or months, but obviously after only a few weeks, we have to adjust it immediately,” economist Can Van Luc said.

Furthermore, according to the expert, the authorities need to monitor the situation more closely. Equally important is that people have the right to reflect if they see a decrease in the price of gasoline, but the price of transportation, the price of some goods for sale and travel remain the same. At that time, they have the right to report to the competent authorities. Mr. Can Van Luc also hopes the authorities must have measures to handle it, otherwise, people will feel dissatisfied.

Solving the problem of supply and demand of goods

In the face of the recent decrease in gasoline prices, while the price of many commodities remains high, Mrs. Dinh Thi Nuong said that the Ministry of Finance advises some measures to strengthen price management and submitted to the Government to issue public electricity on directing ministries, sectors and localities, to strictly control service prices when gasoline prices fell recently.

The Ministry of Finance has also been submitting to the Government a plan to adjust value added tax, excise tax on gasoline and import tax on gasoline for the unleaded motor to reduce import costs of gasoline and diversify import sources.

The ministry also strengthened the review and declared prices of items directly affected by petrol and oil prices.

Mrs. Dinh Thi Nuong also said that essential goods and services are indirectly affected by gasoline and have an impact on the CPI, as well as on people’s lives and business activities. The Ministry of Finance will continue to monitor market price movements and will grasp the production performance of business organizations to take appropriate measures to control prices and stabilize prices.

Prime Minister Pham Minh Chinh just signed and promulgated Official Dispatch No. 679/CD-TTg dated July 31, 2022 on strengthening measures for price management and administration. After that, the Ministry of Finance implemented a number of key tasks.

Commenting on this issue, economic expert Vu Vinh Phu praised the content of Official Letter 679 of the Prime Minister. So far, gasoline prices have fallen sharply, but the market price level has stood still or only decreased slightly. Mr. Vu Vinh Phu said that, first of all, it is necessary to solve the problem of goods supply and demand and avoided to break the supply chain, especially to reduce the intermediary stages.

In addition, it must use the power of the political system, mobilizing retail associations, markets, and neighborhoods and encourage traders to voluntarily reduce prices following the reduction of petrol prices, sharing common difficulties with society.

“The implementation is important. If launching synchronous solutions, the Government’s directives will be implemented effectively, come to life, and ensure the goal of stabilizing the macro-economy and controlling inflation by about 4%,” Vu Vinh Phu said.


Leave a Reply