Petrolimex reports loss, which means possible petrol price increase

Ten days after reducing oil product prices and 22 days after raising the petrol price, Petrolimex, which is now holding 60 percent of the market share, on March 15, reported loss.

The Vietnam National Petroleum Corporation (Petrolimex) on March 15 released the document which compared the current retail petrol and oil prices and the cost prices. The document showed that Petrolimex is incurring the loss of 526 dong per every litre of A92 petrol sold.

According to Petrolimex, in the last 30 days, the A92 petrol price offered in Singapore, the main supply source of petrol for Vietnam, has been staying very high at $86.399 oer barrel, while oil products have been hovering around $85,996 per barrel. With the import price, the price of every litre of A92 petrol in Vietnam should be 17,816 dong, which means that the company is incurring the loss of 526 dong per litre. Similarly, the corporation is incurring the loss of 328 dong per litre of diesel sold and 318 dong per litre of mazut.

As such, Petrolimex is incurring the biggest losses with three products, petrol, diesel and kerosene since the cost prices have been higher by 4.9, 4.3 and 4.1 percent, respectively, than the current retail prices. Meanwhile, the cost price of mazut is now higher by three percent than the current retail price.

The dong/dollar rate to which Petrolimex refers to when calculating the retail prices is 19,100 dong per dollar. Meanwhile, the current import tariff on petrol and kerosene is 20 percent, while the taiffs on diesel and mazut is 15 percent.

Under the Decree 84 on petrol and oil products management, which took effect in late 2009, enterprises have the right to increase fuel retail prices with consideration to prices on world markets. However, the next price increase must be at least 10 days later than the previous increase. If the import price fluctuates, enterprises can raise the retail prices on up to three occasions in a month.

If referring to the Decree 84, petroleum distributors now have the right to raise the oil and petrol prices once again. However, the Ministry of Finance late last week released a document, calling on petrol suppliers to delay the next petrol retail price hike until the end of June, to help curb inflation.

If the time extension had a negative impact on enterprises, they need to report to the Ministry of Finance and the Ministry of Industry and Trade so it could take other measures to stabilise prices.

Since October, 2009, petrol prices had increased five times. The latest increases were 590 dong on February 21 and 450 dong on January 14, 2010.

VietNamNet/VNE

Tags: Petrolimex, Vietnam petrol, Vietnam Petrol prices, Vietnam Petroleum