The Ministry of Finance and the Ministry of Industry and Trade should work closely with relevant ministries, sectors and localities to keep the consumer price index at 7 percent.

Active and feasible

There are currently two forecasts about the global economic picture. Major world organisations say that if the global economy bounces back soon, this will drive the price of fuels and materials up but some others assume that the crisis of public debts in European countries, particularly Greece will greatly affect the growth rate of the world economy so the demand for fuels and materials will not increase sharply and there will be no fluctuations in prices.

According to the Head of the Price Management Department under the Ministry of Finance, Nguyen Tien Thoa the relevant ministries and the Government have put forth  scenarios to control prices feasibly, especially protective measures to cope with the worst situation in the case of soaring prices for fuels and materials.
"We have taken into account all scenarios to control domestic prices if global prices rise sharply. By using funds to stabilise prices and taxes, we will try our best to minimise the negative impact on business production", said Mr Thoa.

Violators in price gauging will be prosecuted

The Ministry of Finance says that to curb price hikes in the remaining months of this year, a score of tougher measures will be taken to strictly control the price of essential goods.

Management agencies will work out appropriate solutions to ensure that if prices on the global ma0rket go down, domestic prices will be managed to reduce in line with the global trend.

The Ministry of Finance will ask functional agencies to revoke business permits or even prosecute violators in price gauging. In addition, the Price Management Department will intensify its inspection of price registration and tax rates on various products, particularly those belonging to the list of goods whose prices are fixed by the State and registered by businesses.

Deputy Minister of Finance, Tran Van Hieu underlined the need for his ministry to work hand in hand with localities and relevant agencies to control prices in the second half of this year.

Mr Thoa says regulations on stabilizing prices and sanctions for businesses violating price registration and declaration have been revised so that all Vietnamese businesses and all economic sectors will be treated on an equal footing on this issue.

Foreign businesses will also have to abide by the regulations in the Price Ordinance, except those stipulated in international treaties to which Vietnam is a signatory.

Controlling prices of many commodities

At a regular session in June, the government has assigned the MoIT and the Ministry of Health to co-ordinate with localities to supervise production, import activities and the price registration and declaration of pharmaceutical businesses and propose measures to control prices.

Mr Thoa said the MoF will introduce gas as one of commodities which needs to be stabilised in the coming time.

The MoF said that price registration and declaration should be made starting July 2010. However, Mr Thoa said fluctuations on drug prices are much related to issues on bidding management and the morality of doctors.

For milk, Mr Thoa said that there are some shortcomings in the increased prices recently. Circular 104/2008/ND-CP provides guidelines for the implementation of decree 75 which require enterprises with 50 percent state capital to submit a price registration and declaration. However, almost all milk enterprises have no state capital in their chartered capital, so they do not submit a price registration.

Therefore, the urgent task for the Price Management Department is to focus on making amendments and supplements to the circular.

It is necessary to inspect steel products regularly to avoid price increases. Steel enterprises are required to submit a price registration including retail prices, in order to control the selling prices in the local market.

Furthermore, it is necessary to stabilise power prices for households and production establishments as well as coal and gas prices for power generation and to continue to adjust petroleum prices and maintain coal prices for such sectors as power, fertilizer, cement and paper till the end of this year.

Keeping price hikes below 7 percent

The MoIT said that to keep price hikes below 7 percent, it will continue to cooperate with relevant agencies and localities to regulate and stabilise the market in order to avoid a shortage of commodities, price escalation and to curb the inflation rate.

The MoIT is focusing on developing a distribution network, expanding the retail system for goods and services, especially in the rural areas, speeding up a plan to develop some essential commodities for production and consumption in the 2011-2020 period with the aim of associating production planning with distribution network planning.

Businesses and localities should continue to implement the campaign “Vietnamese people use Vietnamese products”, and other domestic trade promotion programmes.

Together with relevant ministries and localities, the MoIT will take drastic measures to control the local market and punish illegal price increases smuggling.

Source: VOV