Controlling prices of commodities

Source: Pano feed

NDO – The government and functional agencies have recently issued consecutive decisions to increase the prices of some essential items such as electricity, petroleum and oil, seriously influencing businesses’ production activities as well as causing panic among consumers. The ‘dual’ effect of this price increase always keeps people in constant worry.

In the past, rising petrol and oil prices immediately entailed increases in the costs of goods and services, with some items recording slight adjustments and some others seeing dramatic increases – up to hundreds of thousands of Vietnamese dong. Many items, including foodstuffs, which are thought to be relatively stable, also had their prices adjusted upward. As explanation for this, the majority of businesspeople affirmed that rising input costs plus transport expenses forced the sale price of commodities to hike.

This type of price rise is just a case of taking advantage of the situation; however, it is not easy to handle, according to economists. In the current context of weak purchasing power, the prices of gas, petrol, oil and electricity – essential goods difficult to replace – going up simultaneously will drive consumers to reduce spending, resulting in greater and greater inventories and creating difficulties for enterprises. Rising prices of important input materials and fuels will also increase the economy’s spending and impact the market price equilibrium. The power sector will add about VND13 trillion (US$611 million) to its annual revenues after moving electricity prices up 7.5% since the middle of this month, which also means the whole economy must increase spending by the equivalent portion. Similarly, rising petrol and oil prices are bound to have a spillover effect on the cost of transportation (up about 4%), and a number of other items using those fuels.

In order to control the market price and prevent irrational price hikes on some items, relevant agencies and localities need to closely follow the goals stipulated in the government’s Resolution No. 01/NQ-CP dated January 3, 2015, including monitoring the situation of price fluctuations of several items, the prices of which are regulated by the government. Essential items with upward price fluctuation should be consulted on for price stabilisation. Each enterprise influenced by the price hike needs to focus on renovating technology, improving productivity, reducing production costs and minimising impacts. In addition, local authorised agencies must keep a close eye on price declaration options and strictly handle violations and irrational price increases.

Nowadays, there is no longer a problem of goods shortages and price escalations for the majority of items, especially during the Lunar New Year (Tet) and festival occasions, which proves the increasing effectiveness of the government’s management role in price stabilisation intervention. However, state management agencies need to recalculate their management measures in order to ensure the simultaneous realisation of two objectives: supporting enterprises and continuing market-oriented reforms, which will contribute significantly to creating a premise for sustainable socio-economic development.

Đăng ký: VietNam News