Taxi firms eye fare surge amid gasoline price hike

Taxi firms expect to increase their fares as gasoline prices hit an all-time high.

Nguyen Cong Hung, Chairman of the Hanoi Taxi Association, said taxi firms planned to increase fares by 5-8 percent, or VND500-800 per kilometer ($1 ≈ VND22,800).

The gasoline price surge has increased taxi firm fuel costs by 13.8 percent, he added.

“Most taxi firms in Ho Chi Minh City will be forced to increase their fares” if gasoline prices stay at the current all-time high, Ta Long Hy, Chairman of the HCMC Taxi Association said.

Vietnam gasoline prices hit a new peak Monday, after authorities adjusted them upward for the fifth time in a row. The price of popular gasoline RON 95 rose 3.79 percent to VND26,280, while that of biofuel E5 RON 92 rose 3.9 percent to VND25,530. To reduce gasoline prices, taxi companies, which have been badly hit by Covid-19, recommended the environmental tax be cut as soon as possible.

Environmental tax comprises the highest taxes on gasoline, accounting for around 15 percent of the retail price.

Currently, the environmental tax on RON 95 gasoline is VND4,000 per liter, while that of biofuel E5 RON 92 is VND3,800.

Taxes and fees add up to 42-43 percent of gasoline retail prices.

All-time high gasoline prices and Covid-19 woes have placed many taxi firms in a financial dire strait.

At the end of 2021, taxi giant Vinasun reported a 52 percent decrease in revenue year-on-year, and a net loss of nearly VND274 billion. It had to lay off 2,500 employees, including 1,800 drivers last year, to reduce operating costs.

Mai Linh, another taxi giant, has yet to publish its 2021 report. However, in 2020, the company reported a loss of VND173 billion, and a total accumulated loss of VND1.21 trillion.