Nhat Tin Logistics, which operates 450 trucks, saw fuel prices rise by almost 20% between April and May.
“The spike in gasoline prices has put a lot of pressure on businesses, especially in the transport sector,” said its CEO, Nguyen Van Tu. VnExpress International.
With the price of fuel accounting for around 40% of costs, the company is negotiating with its customers for a 5% price increase and is preparing to cut non-emergency expenses.
She is one of many businesses hurting as soaring fuel prices threaten to drive inflation and ultimately slow the recovery of the economy battered by two years of Covid-19.
RON95 gasoline saw its price rise another 2.5% to a new high of VND32,370 ($1.39) on June 13.
This means that it has increased by almost 39% since the start of this year.
For bus company Tuan Duyen, which operates on the Hanoi-Ho Chi Minh City route, that means diesel costs have doubled since before the pandemic to VND30 million for a round trip.
But the number of passengers has fallen by 40% in two years, said Dao Ngoc Tuan, the owner of the company.
He said he was considering selling the buses but finding reasonable prices is difficult as there are few buyers amid rising petrol prices.
Raising prices is an option, but business owners worry about its effect on sales.
Some companies, however, decided that they could no longer bear any losses.
The Viet Tan Phat bus company this week raised fares on routes between HCMC and the Central Highlands provinces by 29% to 400,000 VND.
Another transport company, Vintrans, has sold some of its buses who consume a lot of fuel and bought 20 new fuel-efficient ones.
The company is also increasing the number of deliveries per trip to reduce costs, which means speed is reduced.
Airlines are expected to face continued difficulties with rising fuel prices.
Dang Anh Tuan, head of communications for Vietnam Airlines, said at a recent event in Thailand that oil prices had risen to $120-160 a barrel from the company’s forecast of $80.
That means spending could be VND 8 trillion higher than estimated and tariffs have been increased accordingly, he said.
Businesses are doing all they can to keep things running smoothly in an environment of inflationary pressures.
Ride-sharing company Gojek, which has seen its drivers’ operating costs increase by 10-15%, is offering new bonuses to the most productive drivers to offset their increased expenses.
It has sought to increase the recruitment of drivers to ensure demand is met during peak hours.
Between April and May, its number of motorists increased by 20% in HCMC and doubled in Hanoi.
Transportation industry insiders are calling for further tax cuts to help lower their costs.
Bui Danh Lien, vice president of the Hanoi Transport Association, said fuel costs used to make up 40% of expenses, but have now reached 50% for many businesses.
They could raise prices but would end up losing passengers, he said.
The government should further reduce taxes such as the special consumption tax to bring down fuel prices, he said.
Nguyen Duc Nghia, deputy director of the HCMC Business Association’s Small and Medium Business Support Centre, offered fuel tax relief for three to six months.
Meanwhile, the government said Vietnam’s gasoline price increase is lower than in other countries, rising only 24 to 62 percent since the start of this year, while in Singapore, which Vietnam often uses as a benchmark, they rose 41 to 84 percent.
Indeed, Vietnam has used its fuel stabilization fund and halved the environmental tax on gasoline to VND 2,000, Le Viet Nga, deputy director of the domestic market department of the Ministry of Industry and Industry, said recently. Trade.
The ministry has proposed removing the tax altogether to bring prices down further.
For now, companies are caught between a rock and a hard place, as continuing operations means accepting low profits or even losses, while rising prices could mean losing customers.
Tu from Nhat Tin Logistics said his company was doing everything possible to ensure prices did not rise, but if inflation continued, it would have no choice but to make further adjustments. prices.