Publication Date: 03-07-2009
Retail prices of petrol and oil has increased by VND700 and VND500-650 per litre respectively following approval from ministries.
The Ministry of Finance and the Ministry of Industry and Trade had received proposals earlier from traders recommending and requesting the price hikes.
Prices for A95 and A92 petrol increased to VND14,700 (US$0.82) and VND14,200 per litre on Wednesday. Prices for kerosene, fuel oil and diesel also increased to VND13,650, VND10,500 and VND12,100, respectively.
The crude oil price recently was hovering around $70 per barrel, nearly double the price of $40 per barrel earlier this year.
With the skyrocketing price, many petrol and oil traders complained about the losses they were incurring with low domestic retail prices.
Traders had estimated their losses at the lower prices to be VND900 per litre of petrol and VND1,500-2,000 per litre of oil.
This was the fifth time that petrol and oil prices increased this year, and total price increases have amounted to VND3,200 per litre, up about 32 per cent as compared with prices at the end of last year.
The State also cut import tax rates for petrol and oil from 40 to 20 per cent, and the Ministry of Finance temporarily stopped collecting fees for the petrol price stabilisation fund to ease traders’ losses.
Import taxes
When traders urged the two ministries to raise retail prices, the ministries considered carefully their proposals and decided to increase the prices, rather than reduce the petrol import taxes, said Nguyen Tien Thoa, director of the Ministry of Finance’s Price Control Department.
"The petrol retail prices in Viet Nam were about VND2,000 lower than that in China, Cambodia, Singapore and Laos", he said.
The country’s biggest gas supplier, Sai Gon Petro, Wednesday also decided to raise the gas retail price by VND24,000 to VND210,000 per 12kg canister.
Other firms such as VT Gas, Elf Gas and Gia Dinh Gas were expected to follow Sai Gon Petro’s lead.
Le Phuc Dai, director general of the Vinagas Dai Viet Energy JSC, attributed to the need for an increase to the global gas price hike, which reached $95 per tonne.
"If the suppliers calculated the entire costs, prices should rise by VND30,000-40,000, rather than VND24,000," said Dai.
The price of gas rose three times in the first two months of this year, hitting VND215,000 per canister by the end of February.
Prices were reduced three times during March-May before rising to VND188,000 per canister in June.
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