Government stands firm on petrol prices

Petroleum traders in Vietnam will be bound to keep petroleum prices at current levels for now, but will receive financial support.

Nguyen Tien Thoa, head of the Ministry of Finance’s Department of Price Management, made the request on the issue on February 10, showing the ministry’s determination to maintain prices of petroleum, a staple in the economy, despite traders’ complaints about big losses.

Starting February 11, the ministry allowed traders to receive more money from the price stabilisation fund to help their business and keep prices unchanged.

As a result, from now on traders will be able to get VND1,650 ($0.08) per litre of regular gasoline, as opposed to the earlier VND 1,200 (0.06).

For diesel it will be increased to VND1,650 per litre from VND1,600. Financial support for kerosene and fuel oil have gone up as well.

Currently, for each litre of gasoline, consumers pay VND300 for the price stabilisation fund. The government authorises retailers to collect this money at the pump. And, although it adds a little bit to the price of gasoline for consumers, the fund is set up to protect them from the volatility of the petroleum market.

According to the ministry, Vietnam has spent around VND11 trillion ($550 million) on efforts to maintain petroleum prices from May 27, 2010 up to now.

Of the sum, the government has cut petroleum import taxes three times since December 23, which have resulted in losses to state revenue to the tune of VND7.5 trillion ($350 million).

In the meantime, the petroleum price stabilisation fund has in recent time spent VND3.5 trillion ($175 million) to keep prices stable. – VIR

Tags: Vietnam petrol, Vietnam Petrol prices