Firms to absorb price hikes

Workers of the Bim Son Electricity Co in the northern province of Thanh Hoa repair lines. — VNA/VNS Photo Ngoc Ha

HA NOI — Increasing prices of essential goods will not preclude the Government from helping businesses in need of assistance, an official of the Ministry of Industry and Trade said at an online meeting held by the ministry on Monday.

The increase in prices of goods such as petrol, oil, gas and electricity is unrelated to the Government's support for troubled enterprises, said Vo Van Quyen, head of the ministry's Domestic Market Department.

Increases or decreases in the prices of those products stemmed from changes in the world market. They were not related to the current production and business difficulties, said Quyen. If enterprises experienced business hardships, the Government would have a support system in place.

"For instance, if a business has a high inventory, this is due to the market system rather than to price, he said. If enterprises do not choose suitable markets for their products, price changes cannot be blamed for their elimination," he said.

"However, the Government still controls the schedule and rate of the adjustment in prices for the essential goods made by the dealers according to market rules," he said.

Dang Huy Cuong, head of the ministry's Electricity Regulation Department, said electricity was a special case, so any price increases for the product were always considered carefully.

In November 2011, Electricity of Viet Nam proposed to increase the price of electricity by 10 per cent. But after careful deliberation, the ministries of Industry and Trade and of Finance decided that the electricity price would have two instances of increase – December 20, 2011 and July 1, 2012 – and would increase by 5 per cent each time.

The rate of 5 per cent would have the lowest macroeconomic impact, Cuong said.

When electricity prices increased on July 1, EVN would retain different rates for different kinds of customers, he said. The price for poor and low-income people remained unchanged, while business would pay 0.5 per cent more.

"That means the increase will have a negligible impact on production industries," Cuong said. — VNS