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Fuel prices down but Vietnamese feel inflation pinch

PremiumBy Thi Ha, Anh Tu, Tat Dat   August 11, 2022 | 05:26 pm PT
Fuel prices down but Vietnamese feel inflation pinch
Owner of Pho Cao Van restaurant in HCMC’s District 1 serves customers. Photo by VnExpress/Quynh Tran
A bowl of beef pho continues to cost VND45,000 ($1.92) despite gasoline prices falling several times in less than two months, says office worker Hoa.

"They said they have to raise prices because of fuel costs. Now gasoline prices have fallen, but their pho still costs me the same," said Hoa, who works for a garment company in District 6, HCMC.

Vietnam gasoline prices on Thursday dropped 3.6-3.8% to the lowest since Feb. 11 as global rates kept falling.

A liter of popular RON 95 gasoline now costs VND24,660 ($1.05), down VND940, while that of biofuel E5 RON 95 costs VND23,720, down VND900.

Thursday’s was the fifth consecutive downward adjustment made to gasoline prices. Compared to this year’s peak on June 21, prices have fallen by 24.22-24.98%.

Hoa finds it increasingly costlier to her favorite breakfast, pho, as their prices have been adjusted upward once or twice since May.

A bowl of pho in Vietnam now costs VND35,000-45,000 on average, up VND10,000 from May.

Pho eateries had blamed their price hike on rising fuel and input costs, but after four consecutive downward adjustments in gasoline prices the noodle soup they serve costs the same.

Fuel prices down but Vietnamese feel inflation pinch

Restauranters now explain that the raw material costs have yet to fall and are significantly higher than last year.

"A kilogram of beef or chicken has become 20% more expensive in the first seven months. Prices of other ingredients also remain high," said the owner of a pho restaurant on Tran Khac Chan street in HCMC’s District 1.

At Pho Cao Van, one of the oldest pho restaurants in HCMC, the owner said prices of noodles, herbs, spices and bones for broth have surged 20-60% from last year.

The prices of coal and gas, two main cooking fuels for pho, have also surged 30% and 3.2% from last year.

"It cost me VND700,000 to buy coal for 20 days last year. Now it’s over a million," said Loi, owner of a pho restaurant in Hanoi.

A VnExpress study also found that prices of food and consumer goods have surged by 10-50%, with that of cooking oil and sugar rising the most.

In the first 7 months, food prices have risen by 1.18% year-on-year. In July, dining out services saw the biggest price hike of 15.27%, according to a report by the General Statistic Office.

Prices of raw materials for animal husbandry and construction are yet to stabilize.

For instance, prices of animal feed have surged 40-60% since January, so poultry and meat have become more expensive.

Meanwhile, construction material costs, including that of cement and steel, are 25-50% higher than last year. In July, construction prices were 7.03% higher than last year, according to the GSO.

Economist Can Van Luc said a buffer period was needed for price adjustments. He called on authorities to investigate and take measures against price manipulators.

In the first seven months, Vietnam’s inflation measured by the Consumer Price Index went up 2.54% year-on-year. The country targets to keep inflation under 4 percent every year.

 
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