Fuel price cuts fail to drag prices down

By Thi Ha, Hoai Thu   July 14, 2022 | 05:23 pm PT
Fuel price cuts fail to drag prices down
A butcher in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
Gasoline prices may have fallen by 10 percent on Monday, but to many people's chagrin this has not had a knock-on effect on other prices.

Three days after fuel prices fell, Hanh, owner of a chicken pho restaurant in Hanoi, has yet to adjust prices downward. A bowl of pho still costs VND40,000-60,000 ($1.71-2.56), up VND5,000-10,000 from June.

He blamed it on the high costs of other items, especially chicken. "A kilogram of chicken still costs me VND110,000-120,000, and so I cannot lower my prices."

In HCMC too, food stalls have yet to cut prices after having raised them earlier to cope with higher fuel and other costs.

Gasoline prices have only fallen by 10 percent after a 35 per cent hike since mid-April, eateries pointed out, adding they therefore have to wait for further fuel price cuts before reducing their prices.

Prices of fresh foods at traditional markets are also unchanged. Hoa, a vegetable seller in HCMC’s Binh Thanh District, said prices are unlikely to fall since heavy rains have affected supply.

A butcher in HCMC’s Go Vap District, also called Hoa, said he could not cut pork prices further since he is already selling at cost.

"Prices of pig of the hoof will probably increase in the next few days, and so retail pork prices are unlikely to fall. Animal feed costs have risen significantly in the first half of this year."

Nguyen, a butcher in a market in Hanoi, said, "Due to bad weather, low demand and higher costs, I suffer losses most of the time."

Gasoline only accounts for 20 percent of fresh food prices, while labor input costs are rising, Hoang, a wholesaler in HCMC, said.

Truong Chi Thien, director of egg producer Vinh Thanh Dat, said the costs of animal feed, labor and packaging have risen by 20-40 percent from last year.

"Egg prices will only decline if input costs fall."

Dinh Trong Thinh, a lecturer at the Academy of Finance, said there would be a lag between changes in gasoline prices and those of other goods.

Despite two recent cuts, gasoline prices remain at nearly VND30,000 a liter, up 25 percent from last year, and so it is understandable that producers, suppliers and retailers have yet to cut prices, he added.

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