World market pushes petrol, oil prices up

Some domestic petrol dealers yesterday, January 14, increased prices by VND300-450 per litre for petrol and oil products due to an increase on the world market.

The Viet Nam National Petroleum Corporation (Petrolimex) surged by VND450 per litre to VND16,400 for A92 petrol, and by VND300 per litre to VND15,500 for kerosene, to VND14,900 for diesel oil and VND13,500 for fuel oil.

Petrolimex deputy general director Vuong Thai Dung said this increase was under Decree 84/2009/ND-CP on trading petrol and oil products effective from December 15, 2009, and followed an increase of petrol and oil products on the world market in the last 30 days.

This was the first increase in petrol prices this year, he said, adding in recent days, prices jumped sharply on the Singapore market which is a major supplier for the domestic market.

Prices on the Singapore market leapt to US$86.2 per barrel of A92 petrol, $88,9 per barrel of diesel oil, $90.7 per barrel of kerosene and $515.7 per barrel of fuel oil. (1 barrel = 159 litre).

Dung said as a result of this increase, Petrolimex lost VND1,000 per litre of petrol and VND800 per litre of oil.

Sai Gon Petrol Co Ltd and Military Petrochemical Joint Stock Company also increased their prices by VND300-450 per litre from yesterday to the same rate as Petrolimex

According to the decree, petrol traders have to match their retail prices to wholesale global prices.

Due to fluctuating global wholesale prices, traders are allowed to adjust their prices to reflect world petrol prices. However, if prices decline within 12 per cent, this cost saving must be passed on to consumers at retail outlets.

If wholesale prices decline more than 12 per cent against the existing retail prices, petrol traders have to make contributions to the petrol price stabilisation fund.

Traders can introduce retail price increases of 7 per cent if petrol and oil wholesale prices surge by that amount.

In case wholesale prices increase by 7-12 per cent, traders can increase retail prices by 7 per cent plus 60 per cent of the surplus of 7-12 per cent. The balance would be compensated by the petrol price stabilisation fund.

If wholesale prices increase more than 12 per cent, the State will develop solutions to maintain retail price stability through the stabilisation fund and import tax reductions.

VietNamNet/Viet Nam News

Tags: Vietnam petrol price, Vietnam Petroleum