Fuel wholesale traders to get more money

The Ministry of Finance has agreed that from today, petrol wholesale traders would receive more money from the fuel price stabilisation fund to retain stability on the domestic petrol market as the world price of oil has increased to around US$105 per barrel.

According to official letter 1786/BTC-QLG issued yesterday, the new rate increased by VND450 per litre to VND1,650 for petrol, by VND700 per litre to VND2,300 for diesel and to VND1,400 for fuel oil and by VND 950 per litre to VND2,150 for kerosene.

The Ministry of Finance has clarified that the fuel price stabilisation fund has not run out of money.

It said VND1.97 trillion remained in the fund and would help keep fuel prices stable until the end of February.

However, oil companies have been claiming that just VND551 billion was left in the fund.

Launched in 2009 by collecting a VND400 surtax on every litre of petrol sold, the fund has been governed by the Ordinance on Price.

The mechanism limits the number of times oil prices may be raised in a year.

Oil companies can increase retail prices by 7 per cent if world prices rise by a similar amount within 30 days. If global prices rise by 7-12 per cent, they are permitted to increase prices by 7 per cent plus 60 per cent of the surplus. The difference will be made up by using money from the fund.

If prices rise by more than 12 per cent, the Government will cut the import tax.

Petrol wholesale traders have been complaining recently that they incur a loss of VND2,400 on every litre they sell.

The Viet Nam National Petroleum Corporation (Petrolimex) said the price of a barrel of A92 petrol had surged to $105.4.

After adding expenses, the domestic retail price should be set at VND18,461 for a litre of petrol to break even but traders have to sell at VND16,400, a loss of more than VND2,000.

Claiming the subsidy from the fund fails to make up this loss, some companies have reduced commissions for retailers, causing petrol stations to stop or cut sales.

Tuoi Tre newspaper quoted a Ministry official as admitting that some petrol stations had not reopened after Tet.

The ministry would instruct oil companies to persuade their agents to sell petrol, he said.

They could not stop selling just because of lower profits, he said, warning the Market Management Department would crack down on such violations, even cancelling licences if required. — VNS

Tags: Vietnam fuel prices