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Retail fuel prices to follow world prices: importers   2008-12-11 - TN, AFP

Fuel importers, planning for another price cut this week, said they would tweak retail prices based on global price movements.



Vuong Thai Dung, deputy general director of top fuel importer Petrolimex, said his company would follow global market moves and make necessary price adjustments with an eye on both its profits and consumers. Petrolimex, or Vietnam National Petroleum Corp., controls about 60 percent of the domestic market.

But prices in Vietnam should not be always compared with those in other countries because the local situation is different, Dung said, pointing out that fuel importers have to pay a slew of taxes adding up to around 65 percent.

Last week, the government cut fuel prices for the third time in less than a month. The popular 92-octane gasoline and diesel now cost VND12,000 a liter.

Importers admitted that at current prices they earn a profit of VND2,000-3000 on every liter.

But they plan to cut prices again and expect the government to approve it this week.

Analysts said when world oil prices drift to below US$45 per barrel, the local price should be VND10,000.

Nguyen Minh Phong of the Hanoi Socio-Economic Research Institute said, however, that since there is no real competition in the domestic fuel market, fuel traders do not see the need to lower prices for the sake of consumers.

Global prices dipped Tuesday after jumping on Monday on hopes a US economic stimulus package and an auto sector bailout would boost the world’s biggest energy consumer, traders said.

Light sweet crude for January retreated 30 cents to $43.41 on the New York Mercantile Exchange (NYMEX) on Monday.

Investors will be watching closely a December 17 OPEC meeting to be held in Oran, Algeria, where the oil cartel is widely expected to announce another round of production cuts to shore up slumping prices.

The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world’s crude, maintained existing output levels at its last meeting in November.

Oil prices have plunged by about 70 percent since reaching record highs above $147 in July as the global economic slowdown weakens demand.

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