Hanoi (VNS/VNA) - Falling petrolprices have given cheer to people and businesses and may stimulate consumerdemand in the near future.

Nguyen Minh Chau, Director of Hanoi CNCAccurate Mechanical Company Limited, said that petrol prices accounted for themajority of transportation and logistics costs of enterprises.

With prices continuing to plummet, peopleand businesses are very excited as gasoline prices have successively surged inthe past months, putting pressure on businesses, said Chau.

Although not a unit operating in thetransportation industry, the decrease in gasoline prices has also partly had agood influence on the transportation, production and business activities of thecompany, said the director.

Nguyen Cong Thang, a driver of the Hanoi –Hai Phong route, said when gasoline was above 30,000 VND per litre (1.3 USD),the one-way cost was about 500,000 VND, but with the past two strong reductions,the cost has fallen to 400,000 VND.

“We as citizens are very happy when theprice of gasoline drops continuously. The cost is less. I also hope that, inthe future, if possible, the government's policies will continue to lower theprice of gasoline; at the same time, controlling prices of daily livingitems," he added.

Bui Danh Lien, Vice Chairman of the HanoiTransport Association, said that the reduction in gasoline prices helpedbusinesses in the transport industry reduce production and operating costs.

However, the world petroleum price movementsare still unpredictable, though there is still room for price reductionsdomestically.

The Government, ministries and brancheswill continue to propose to reduce import tax and excise tax to further lowergasoline prices, help cut down costs, and enhance the competitiveness ofenterprises.

Proposalon tax reduction

The Directorate for Roads of Vietnam(DRVN) has sent a written request to propose a reduction in value-added tax fortransportation services and reduce corporate income tax to support transportbusinesses.

The directorate said that through itssurvey of the operation of transport businesses across the country, it foundthat transport enterprises were facing many difficulties and operating inmoderation.

While fuel prices soar, fuel costs in thecost structure account for 35-45%, and many transport enterprises in provincesand cities across the country have not yet increased their freight rates.

For freight transport, the survey showedthat with the current gasoline price, freight rates should increase by 10-20%depending on the route and type of goods to offset the increase in fuelprices./.