Vietnam News Network

Vietnam News: Local, National, Business, Sport, Entertainment and Technology

Trade XRPUSD, Bitcoin and Cryptocurrencies

BUY & SELL XRPUSD | View XRPUSD News & Updates


Buy Sell XRPUSD, Bitcoin and Cryptocurrencies

Government announces fuel price hike   2008-07-22 - ThanhNienNews

 
A fuel bowser in HCMC Monday shows the higher fuel prices  
After a five-month price freeze, the government lifts the retail price of petrol to try to offset some of the cost of subsidizing a commodity that’s doubled in price over the past year.

 

 

Vietnam’s retail petroleum prices increased Monday by 31 percent, the biggest ever hike, as the Vietnamese government tried to reduce the impact on the national budget of surging global oil prices.

Vietnamese Minister of Finance Vu Van Ninh said the price rises, which came into immediate effect, would reduce the amount of money the government was allocating to fuel subsidies.

After the government’s announcement, the price of A92 petroleum rose to VND19,000 (US$1.13) a liter from VND14,500 ($0.86), the price of diesel oil rose to VND15,950 ($0.95) a liter from VND13,950 ($0.83) and the price of kerosene rose to VND20,000 ($1.20) a liter from VND13,900 ($0.80).

Despite the price rises, the first in five months, Vietnam’s retail fuel prices were still lower than in other Southeast Asian countries, Minister Ninh told a press briefing in Hanoi Monday.

Petroleum prices now stand at $1.61 per liter in Singapore, $1.38 in Cambodia, and $1.20 in Thailand.

Vietnam has raised retail petroleum prices twice since the beginning of this year.

On February 25, the price of A92 petroleum rose by VND 1,500 (8.9 cents).

Community responsibility

“When international oil prices are this high, the principle of community responsibility must be implemented to share the hardship between the government, organizations and consumers,” the Finance Ministry said in a statement.

The latest price hike will limit fuel smuggling, Minister Ninh said.

Smugglers have taken advantage of Vietnam’s subsidized fuel prices to illegally transport thousands of liters of fuel to Cambodia each day to sell at a profit.

Vietnamese petroleum importers suffered losses of VND14.525 trillion ($864.58 million) in the first six months of this year, because import prices were higher than domestic retails prices set by the government.

World crude oil prices averaged $139.70 a barrel in July, double that of a year ago.

The oil price is forecast to continue increasing, according to the Finance Ministry.

With the price hike on July 21, the state is expected to allocate around VND53 trillion ($3.19 billion) to fuel subsidies in the second half of this year, assuming the world oil price averages $145 per barrel, the ministry said.

Vietnamese Prime Minister Nguyen Tan Dung has called on government agencies to ensure the nation had an adequate supply of fuel.

The prime minister asked commercial banks to ensure sufficient foreign currency supply for petroleum importers and allow cash-strapped petroleum importers easily access bank loans.

PM Dung ordered the Ministry of Finance to subsidize local petroleum firms’ losses in a timely manner.

The Ministry of Industry and Trade was also urged to step up its surveillance of the petroleum industry, especially retail prices and fuel quality.

The ministry was asked to continue its efforts to stamp out fuel smuggling.

Meanwhile, local authorities were asked to be on the lookout for any efforts to “unreasonably” lift the prices of other goods and services.

Higher fuel prices will add upward pressure on Vietnam’s inflation rate, which hit 26.8 percent in July.

The government has named inflation its highest priority this year and, as a consequence, lowered its 2008 growth target to 7 percent from 8.5-9 percent.

Ministries, provincial people’s committees and utility companies have been asked to continue to stabilize retail prices of electricity, water and coal, as well as a range of other goods and services whose prices are set by the state.

The State Audit Agency will publicly release the result of its audit of petroleum traders.

The state will offer greater social welfare to fishermen, as well as ethnic and poor people, to help them cope with higher fuel costs.

The government has also embarked on a campaign to encourage individuals and businesses to use fuel economically.

The government paid $5.9 billion to import petroleum products in the first half of this year, a 68.9 percent increase in spending on the fuel, according to the country’s General Statistics Office.

To reduce reliance on petroleum imports, Vietnam, in late 2005, started the construction of its first oil refinery, Dung Quat Refinery, which will have an annual refining capacity of 6.5 million tons in central Quang Ngai Province.

The refinery is scheduled to become operational in February 2009.



Other news

Stock market plummets amid petroleum price hike   2008-07-22

Vietnam retains long-term potential, IDG Chairman says   2008-07-22

Dong reaches 3-week high as inflation concerns ease   2008-07-22

Local executives lack leadership: conference   2008-07-22

Stock briefs   2008-07-21

Cotton maker to trade again on stock market   2008-07-21

Vietnam, Siam Cement in $3.77 bln petrochemical deal   2008-07-21

Ministry to simplify real estate procedures   2008-07-21

Vietnam's rice exports up 2 percent, prices dip   2008-07-21

Property cools in capital with glum economy   2008-07-20

VN, Thai reps seek rubber deal   2008-07-20

City to get new outlying commerce hub   2008-07-20

Making hay while the sun shines   2008-07-20

BUSINESS IN BRIEF 20/7   2008-07-20