Nguyen Van Nen, Minister and Chairman of the Government Office and Spokesman of the Government, officially responded to a number of issues of press and public concerns under the management of the Ministry of Industry and Trade, like power price hike, gasoline price hike and rice purchasing for temporary storage.
Electricity price hike is necessary
The latest power price hike did not receive broad consent, as the Electricity of Vietnam (EVN) was said to lack transparency in power pricing. If the Ministry of Industry and Trade only relied on the report of EVN to decide on the price, it was not fair to consumers. Minister Nen said the Government deemed the power price adjustment on March 16 necessary. Based on audited results in 2013 and cost prices in 2014, only oil price dropped while other inputs like coal and gas prices, water resource tax, and electricity price sold from small generators rose. The pricing decision was consistent with Decision 69/2013/QD-TTg on the mechanism for average electricity retail price adjustment and Decision 2165/QD-TTg of the Prime Minister on bracket of retail electricity rates in the 2013 - 2015 period.
The price adjustment plan was also agreed by the Ministry of Industry and Trade, the Ministry of Planning and Investment, the Ministry of Finance and the State Bank of Vietnam (SBV). This was also the lowest price option and had least impacts on economy and society. The price rise was forecast to cause the consumer price index (CPI) to gain 0.18-0.23 percent in 2015 while the power subsidy for poor and policy-benefiting families was estimated to rise by VND150 billion a year. As for big power consumers like steelmakers and cement producers, cost prices of these products are forecast to rise 0.07-0.66 percent, he said.
Gasoline price hike does not produce inflationary pressures
It is said that raising electricity and gasoline prices at the same time is not rational as this will cause inflationary pressures and affect people’s livelihoods and enterprises’ operations. Minister Nen said the hike of electricity and petroleum prices in March 2015 was carefully weighed up by relevant authorities. Given low CPI growth in 2014 and early 2015, the change in electricity and gasoline prices will not cause much impact on macroeconomic stability. The fuel price increase on March 11, 2015 pushed up CPI by 0.04 percent. The power price hike was estimated to boost CPI growth in 2015 by 0.18-0.23 percent.
Electricity and petroleum are very important commodities of the economy and their price changes are placed under strict management mechanism. Petrol price is regulated under the market mechanism and placed under the State management. The retail price is adjusted based on global price movements in combination with regulatory tools and petroleum price stabilisation fund as stipulated in the Decree 83/2014/ND-CP of the Government on oil and gas business.
Purchasing rice for temporary storage is favourable
It is said that rice purchase for temporary stockpiling is difficult and ineffective because food businesses have not actively joined. Minister Nen said the purchase of 1 million tonnes of rice for temporary storage during the harvest season aims to support farmers to sell rice, increase income and stabilise prices.
Shortly after the Prime Minister decided on this issue, the Vietnam Food Association carried out the programme and attracted 128 merchants. To date, merchants have bought about 80 percent of volume set.
The Ministry of Agriculture and Rural Development set up an interdisciplinary panel to inspect and supervise the programme in the Mekong Delta. The ministry will report on the results soon.
Apart from rice purchasing, the Government urged relevant bodies and businesses to boost rice export. The Government also assigned the Ministry of Industry and Trade to work out the Vietnam Rice Export Strategy.
Huong Ly
Vietnamese
