Petrol price may rise by up to 500 dong but not yet

Petrol distributors’ attempt to raise petroleum product prices by up to 500 dong per litre earlier this week has not been accepted as yet.

Under the proposal made by a number of  key petroleum importers and distributors, retail prices of petrol and oil products would rise by up to 500 dong per litre.  Distributors said world oil prices had increased so sharply that they were no longer able to make a profit.

Vuong Thai Dung, deputy general director of Petrolimex, which holds 60 percent of the market share, said world prices are remaining at high levels. In Singapore, the main supplier for Vietnam, A92 petrol is offered at $87 per barrel, while oil products are at nearly $90.

As a result, Dung said, importers are incurring a loss of over 1,000 dong per litre after tax and expenses for every litre of petrol sold. As for oil products, importers are incurring a loss of 800 dong. As such, the corporation has not made any profit over the last 30 days.

However, while Dung declined to reveal a plan on adjusting petrol and oil products’ prices, other importers admit they aim to raise sale prices by up to 500 dong per litre.

Meanwhile, a senior official of the Ministry of Finance confirmed that his ministry had received a proposal on raising retail petroleum prices. However, the ministry has not approved the price adjustment.

Under Decree 84 which took effect on December 15, 2009, enterprises have the right to adjust retail prices after considering price performance in world markets. If the import price fluctuates, enterprises can adjust the retail prices up to three times during a single month.

However, in order to raise the retail price, enterprises must meet requirements on a “30 day reserve”.  As a result, because only 26 days have elapsed since December 15, when the Decree 84 took effect, enterprises are not yet allowed to raise prices.

VietNamNet/VNE

Tags: Vietnam petrol price, Vietnam Petroleum