The sudden rise in consumer price index (CPI) in September was a result of sharp increases in prices in four goods and services, said Minister of Finance Vuong Dinh Hue.
Consecutive petroleum price hikes add to inflation
Hue went on to say that better estimates would be helpful in controlling inflation.
The country’s CPI increased by 2.2% August to September, equivalent to the increase in the entire first eight months of the year. The increase has been attributed to price hikes in pharmaceuticals and medical services, education and training, petroleum and housing and construction materials.
He said that last month prices of medicines and medical services soared by 17.02%, adding 0.95% to CPI. Education and training increased by 10.84% during that month, adding 0.65% to CPI.
Three petroleum price hikes caused a 3.33% increase in prices of transportation, adding around 0.34% to the CPI. Meanwhile, prices of housing and construction materials increased by 2.18% last month, adding another 0.21%.
According to Hue, price hikes of those four goods and services have added a combined 2.1% to the CPI, accounting for 95% of the entire increase in September.
He added that, if there were more accurate estimates price management methods could be more effective in preventing inflation.
In order to have more precise estimates, he said, there must be closer co-operation between ministries and branches as well as between State agencies and local governments.
“The sudden spike we saw last month could have been prevented if we had created a road map for prices throughout the year, instead of suddenly adjusting them in September, which is also the beginning of the new school year," he said.
Concerning excise taxes on petroleum products, Hue said that such taxes are levied by countries all over the world, and are appropriate because petroleum is a non-renewable resource that is of central importance to the economy.
He further noted that Vietnam has applied taxes on petroleum products since 1996, but the tax rate here is still low compared to other countries, only 1% of the selling prices, or USD0.1 per litre. Hong Kong's petrol tax is at USD0.78 per litre, India's USD0.61 and Australia's USD0.4-USD0.5.
The ministry is scrutinising all taxes and fees in order to keep up with changes in the market, he added.
Recently, Prime Minister Nguyen Tan Dung requested that relevant agencies take immediate measures to control inflation after the CPI spike in September.
