Vietnamese consumers and businesses, who sighed with relief just some days ago when hearing about the petroleum and foodstuff price decreases, have been dazed by the five percent unexpected electricity price increase.
A high hope on the consumer price index (CPI) further decrease arose last week after rapid fire pieces of good news: the petroleum and some other goods’ prices decreased, while the General Statistics Office announced the CPI decrease of 0.26 percent in June.
However, the hope has died out with the decision by the Ministry of Industry and Trade to raise the electricity price by five percent from July 1. Meanwhile, consumers have been told that the clean water price would also increase from July 11.
More difficulties put on businesses’ burden
Businesses have been dealt another blow with the five percent electricity price increase. It seems that the plan by businesses to cut down the production costs to boost sale would never come true.
Phung Van Chinh, Director of Tan Thinh Brick Company in Vinh Phuc province, said his company has to spend 400-500 million dong in electricity bill every month. With the five percent price increase, he would have to pay 25 million dong more a month, which was a small sum of money in the past, but is really a burden now, when construction materials have been selling very slowly.
However, 25 million dong would not be the only additional item enterprises have to pay. The electricity price would lead to the price increases of many other input materials, thus leading to the price increases of other goods and services.
A director of a steel company also said that the five percent electricity price increase would be unbearable for steel mills, which consume much electricity to laminate steel.
“I still do not know what I should do in such a circumstance. Raising the sale price proves to be impossible in the context of the current weak demand,” he said.
Meal services would be more expensive
Nguyen Van Hai, the manager of a restaurant on Nguyen Phong Sac Street, has affirmed that the service fees would increase, though he still cannot say about how sharp the price increase would be.
Meanwhile, Ngo Ngoc Anh, the owner of a popular restaurant in My Dinh area, said she would raise the prices by 10 percent at least.
The petrol price has decreased, but the decrease was lower than the price increase before, which means that the petrol price remains very high. The gas price has increased by 11,000 dong per 12 kilo tank. The electricity has increased by five percent, while the water price would also rise.
“How can I make profit if everything is going more and more expensive?” she said.
However, Nga, the owner of a street rice shop on Tran Nhan Tong, said she still cannot make decision now. Most of her customers are students, who cannot afford expensive lunches. A 5000 dong increase may keep the customers away from her shop.
Consumers’ pockets would shrink
The electricity price increase would be a burden on people, both the rich and the poor. Bui Thi Xuan in Cau Giay district said that she has to pay 3 million dong for the electricity bill every month, and she would have to pay 100,000 dong more from July.
However, this is not a problem for Xuan. What she is more worried about is that the electricity price increase would trigger the price increase wave of a lot of other goods and services.
Tran Van Ninh, an immigrant worker, said that he is considering returning to the home village, because everything is getting more expensive in the big city, while the boss refuses to pay him more.
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