The March 29 hike in petrol prices is a cause for concern for HCM City transport companies who are likely to increase tariffs by 10 per cent, the industry association said.
The HCM City Cargo Transport Association was referring to the Ministry of Finance's decision to raise retail fuel prices by VND2,000 to 2,800 a litre. A92 petrol now costs VND21,300 (About US$1) a litre and diesel has gone up to VND21,100 a litre.
The hike, the second since late February, was a headache for transport companies which were already grappling with several difficulties, it said.
With electricity prices hiked on March 1, costs had risen by 15-20 per cent for the industry, it said, adding the rising bank interest rates and drivers' wages had also fuelled the rise in costs.
Dang Duc Tiep, Director of the Dang Tien Transport Services and Trading Company Ltd based in Binh Thanh District, said his company had to deliver 15 containers of cargo in two days' time.
But with the fuel prices hike, costs would go up and it could not convince customers to pay more for the consignment, he said.
Minh Thanh Transport Company said raising tariffs would be hard because many customers had not even accepted the 20 per cent hike effected following the previous petrol price hike on February 24.
Luong Cong Thanh, Director of the Cong Thanh Delivery, Transport and Trading Company Ltd, said tariffs could not be raised overnight and persuading customers could take a week or more.
Transport companies had to absorb the losses suffered during this period, he lamented.
Chairman of the HCM City Taxi Association Ta Long Hy said most operators had been hit by the rise in fuel prices.
Many had only just increased fares by 12-15 per cent and adjusted meters following last month's hike.
"It will take time to increase fares because the meters in the Association's 10,000 taxis need declaring and verifying again."
He said the association was discussing with its members the adoption of new fares.
It had called for reducing the value-added tax to ease difficulties for taxi operators but the proposal had not been approved, he said.
Nguyen Manh Hung, Cairman of the Viet Nam Automobile Transport Association, said with petrol prices going up by 10 per cent and the diesel price by 20 per cent, the cost of operating petrol vehicles would rise by 5 per cent and diesel vehicles by 7 per cent.
Operators were certain to increase tariffs, he said.
The latest hike was out of the blue and relevant authorities should consider carefully before increasing petrol prices since if they went up so much every month, not only the transport sector but also other industries would be severely hit.
The resultant volatility in prices would also affect people's psychology, he warned.