The banning of price rises for the ten essential goods and services the government selected to rein in inflation is expected to end in June, raising a question of what will happen afterwards.
The government is in a quandry over price increases for essential goods
“The administrative order for not increasing prices of the ten essential goods and services has contributed to curbing the inlfation, but I think it is only a temporary measure,” said Huynh Dac Thang, deputy director of Planning Department under Ministry of Industry and Trade.
Late last March, Prime Minister Nguyen Tan Dung asked state-run enterprises not to increase prices of electricity, transport fees, cement, steel, medicine, clean water, fuel and coal until June.
“We do not know whether prices for the ten will increase or not. What will happen after June? The inflation rate could surge again if the prices of these ten float,” said Pham Vu Anh, deputy director of Price Management of the Department.
Meanwhile, the consumer price index in April increased by 2.2 per cent against last month and 11.6 per cent in comparison with 2007. Anh said “global materials and fuel prices are surging,” adding that, state-run corporations and groups would have to set up a pricing roadmap for the remaining six months of the year.
However, heavyweights such as Electricity of Vietnam, Vietnam Cement Corporation and Vietnam National Oil and Gas Group continue to whine about their losses as global fuel and material prices soar.
“If we do not increase billing people a deadlock in production is unavoidable because the prices of imported materials and fuels are too high,” said Ly Tan Hue, deputy general director of Vietnam Cement Corporation.
Speaking at a meeting held in Hanoi last week, Vice Minister of Planning and Investment, Nguyen Duc Hoa, said the government would move after June depending on the domestic situation.