Monday , June 17 2024

Freight rates to fall after lag as oil declines

Transport companies have not reduced tariffs despite the fall in fuel prices since it takes time for the market to adjust, a deputy minister has said.

In response to Prime Minister Pham Minh Chinh’s recent query about why prices of consumer goods and services have not fallen though gasoline prices have, Deputy Minister of Transport Nguyen Xuan Sang said this is because there is typically a lag before transporters reduce tariffs when fuel prices fall.

“Fuel prices have not fallen by a large amount and therefore transport companies have not lowered their prices.”

His ministry has ordered them to cut them soon, he said.

Gasoline prices have fallen four times and by a total of 22 percent since June 21.

Sang expects transporters to reduce tariffs when fuel prices stabilize.

Around 80-90 percent of road transport operators have increased tariffs by 10-15 percent this year to offset the rise in fuel prices, he said.

However, sea freight has fallen by 20-25 percent from this year’s peak, he added.

Chinh ordered government bodies to review the prices of consumer goods and services and penalize anyone found hiking them without justification.

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