Prevent unreasonable price increases

The increase in gasoline prices has a direct impact on the prices of goods and services. Source: Internet.

Reporting at the meeting of the National Assembly Standing Committee, Director of People’s Aspirations Committee Duong Thanh Binh proposed to the National Assembly Standing Committee to request the Government and the Prime Minister to direct the Ministry of Industry and Trade, the Ministry of Finance and relevant ministries and sectors to have solutions on effective management and control prices of goods and services when adjusting petrol and oil prices in order to limit profiteering; taking measures to support people and businesses.

Regarding this issue, the Ministry of Finance said that gasoline prices on the world market have increased recently due to the impact of the conflict between Russia and Ukraine. After the spike in the first two weeks of March, the world oil price showed signs of stabilizing at US$110-120/barrel. However, in the context of geopolitical tensions that continue to fluctuate rapidly and unpredictably as well as the impact of punitive measures from all parties, most organizations have given the opinion that oil prices can continue to stay at a high level of US$110-130/barrel and do not rule out the possibility of a rise to US$150/barrel.

The increase in gasoline prices will directly affect the prices of goods and services which use gasoline as an input, especially freight rates, and thereby indirectly affect other goods and services. However, in some areas, with some items, there may still be situations where taking advantage of the price of gasoline increases prices.

This issue has been forecasted and the Ministry of Finance has coordinated with ministries and sectors to report in a timely manner; Deputy Prime Minister Le Minh Khai, Director of the Steering Committee for Price Management, made comments to direct the management and administration of prices in the first quarter and the whole of 2022 in Official Dispatch No. 882/VPCP-TH dated February 10 2022, Notice No. 65/TB-VPCP dated March 2, 2022, Notice No. 81/TB-VPCP dated March 24, 2022.

Accordingly, it is necessary to continue closely monitoring world economic developments, the situation of general inflation, price movements of fuels and strategic materials, especially world oil prices; on that basis, stepping up the work of synthesis, analysis, forecasting of scenarios and response plans in case goods on the world market continue to increase in order to control domestic production, balance supply and demand and manage prices appropriately.

The Deputy Prime Minister also suggested continuing to implement a proactive and flexible monetary policy, closely coordinating with fiscal policies and other macroeconomic policies to control inflation following the set target. At the same time, contributing to support and removing difficulties for production, business and people's lives affected by the Covid-19 pandemic. Continuing to control core inflation in 2022 to create a basis for general inflation control.

Deputy Prime Minister Le Minh Khai also asked ministries, sectors and People's Committees of provinces and cities to specifically guide and direct local authorities to strengthen inspection and supervision of listing prices and public pricing information.

Checking the observance of the law on price, strictly handle cases of speculation and unreasonable price increases. At the same time, it is necessary to closely monitor the price of gasoline, and strengthen the review of price declarations of enterprises to assess whether the price increase is consistent with the fluctuations of input factors, especially the petrol costs in price-forming factors.

In addition, localities need to continue to effectively implement the market stabilization program. Accordingly, requesting distribution, wholesale and retail enterprises to step up the implementation to stabilize the price level of goods and services in the area.

Accordingly, on February 7, 2022, the Ministry of Finance issued Official Letter No. 1076/BTC-QLG to ministries, sectors, People's Committees of provinces and cities, trade associations and corporations on continuing to strengthen the implementation of management and price stabilization.

Regarding the management and administration of the prices of specific commodities, the Deputy Prime Minister stated that the competent authorities needed to actively and synchronously deploy the proposed solutions for each item to stabilize the market price level. Furthermore, focusing on removing difficulties for production and business to prepare a sufficient supply of goods to meet consumer demand, and facilitate the circulation and distribution of goods and services. In case of large fluctuations in prices, the units should base on the provisions of the Law on Prices to propose and organize the implementation of appropriate price stabilization measures.

One of the next important solutions is to continue focusing on informing, dissemination, publicity and transparency of price information to control inflation expectations; limit inaccurate information that causes confusion for consumers, causing market instability.

According to some economic experts, at this time, the fear of inflation is not worrisome, but we cannot be subjective about the fluctuations in gasoline prices. Gasoline prices have increased, but it has also tended to decrease recently, reducing pressure on inflation.