Despite drops in crude prices, petrol prices in Vietnam remain high

Customers hoped that petrol prices would decrease when the crude oil price dropped to a 7-month low. Despite crude prices decreasing continuously for the last 20 days, petrol distributors still claim they are incurring losses.

On May 19, the crude oil price in the world market dropped sharply to $69.11 per barrel after reaching the 19-month highest peak of $87.15 per barrel on May 3. However, the sharp fall of the world price seems have no influence on domestic distributors

In the latest report on May 3, Petrolimex, which is now holding 60 percent of the market share, said that with the current petrol retail price they still incurred a loss of 1500 dong per litre of sold, 1800 dong per litre of diesel and 1800 dong per litre of kerosene. Since May 19, when the crude oil price dropped to $69.11 per barrel, the enterprise’s loss has reduced to 800 dong per litre of petrol sold, 1251 dong per litre of diesel and 1200 dong per litre of kerosene.

Vuong Thai Dung, Deputy General Director of Petrolimex, said that the loss incurred by the enterprise did not decrease significantly despite the sharp fall of the crude oil prices. Dung said that though the crude oil price have decreased considerably, the prices of petrol finished products imported from Singapore remains high. By May 19, the average A92 petrol price of the last 30 days was $89.07 per barrel, while the average diesel price was $94.24 per barrel, and the price of kerosene was $93.41 per barrel.

“Currently, Petrolimex is still incurring loss with the current retail prices, therefore, it still cannot ease the retail prices,” Dung stated.

Representative of the Military Petroleum Company also said that the company is incurring the loss of 500 dong per litre of petrol and 1000 dong per litre of diesel.

The leader of a big petroleum company in Hanoi said that with the above import prices, his company is incurring the losses of 100-200 dong per litre of petrol and oil sold. The leader said that his company is considering easing the retail price in one more week, if the import tariffs stay at the current levels (17 percent on petrol and 10 percent on diesel).

Doubts have been raised about the accuracy of the reported losses due to the large gaps in the losses announced by different companies. Le Dang Doanh, a renowned independent economist said that while enterprises have their own arguments, the Vietnam Association of Consumers Protection should also have its own research to find out the truth and express its voice.

Doanh said that the crude oil price reduction should be seen as the important factor for petroleum distributors to consider easing the retail prices

Even Nguyen Tien Thoa, Director of the Price Control Agency, the arm of the Ministry of Finance, also thinks that the ‘losses could not be as high as reported’.

Dau tu chung khoan

Tags: crude prices, Vietnam petrol, Vietnam Petrol prices