WB: Vietnam should support people to cope with gasoline prices

This is the recommendation made by the World Bank (WB) on June 13, in its June macroeconomic update report on Vietnam. Accordingly, competent authorities need to be cautious with inflation risks when fuel and imported goods prices continue to increase. These factors can hinder the ongoing recovery of domestic aggregate demand.

“Temporary support measures, including targeted direct support, should be considered to help poor households cope with rising fuel prices,” the report said.

This organization assessed that the shock to world commodity prices seemed to mainly affect gasoline, with a spillover effect that increased transportation costs, so a temporary, targeted subsidy policy for major gasoline users (such as truck drivers) is also a measure that should be considered to reduce difficulties and limit inflationary pressure.

On the afternoon of June 13, gasoline prices in Vietnam increased for the sixth consecutive time since April 21 to a new record of more than VND32,000 per liter. Accordingly, RON 95-III gasoline is more expensive by VND5,060 per liter, and E5 RON 92 gasoline is VND4,640 per liter. The continuous increase in gasoline prices has affected many services and goods, putting pressure on people's wallets.

In addition, the WB also believes that the Vietnamese government should encourage investment to help increase total supply. At the same time, Vietnam needs to encourage the production and use of alternative energy to reduce the economy's dependence on imported fuel in the medium term and promote greener growth.

The World Bank also assessed that Vietnam's inflation has increased but is still significantly lower than the Government's target of controlling it below 4%. In particular, soaring gasoline and diesel prices are the main factor driving inflation. Food prices also tend to increase slightly.

At the recent meeting on price management, representatives of ministries and branches also assessed that inflationary pressure has been high in recent times, with many potential risks at the end of the year. Compared to the same period last year, the average CPI in the first 5 months of 2022 increased by 2.25%; Core inflation in the first 5 months of 2022 increased by 1.1% compared to the beginning of the year. To cope with this situation, Deputy Prime Minister Le Minh Khai requested the flexible use of the Petroleum Price Stabilization Fund, with scenarios to ensure supply and reserve import options when necessary...

The Ministry of Finance is also planning to propose a drastic reduction in environmental protection tax on gasoline to help curb inflation in the future.

According to VnExpress