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Vietnam gov’t vows to keep 2008 fuel prices stable
Vietnam has ruled out fuel price hikes for the remainder of the year, signaling that it will put the fight against double-digit inflation ahead of worries about the cost of subsidies.
Prices of petrol, diesel, power, coal, steel and fertilizer “will not be raised in the remaining six months of 2008,” Deputy Industry and Trade Minister Bui Xuan Khu said in a government report Wednesday.
Hanoi raised fuel prices by one-third for diesel and 11.5 percent for petrol in February, the first hike in three months, but they remain well below global levels.
In late March, after several months battling inflation, the government imposed controls on 10 “essential” commodities – petrol, electricity, coal, water, cement, steel, school and hospital fees, bus, rail and air travel.
Vietnam’s annual inflation hit 26.8 percent in June driven by sharp jumps in food prices, marking the eighth month in a row with double-digit inflation.
The curbs leave Vietnam out of step with other Asian nations after China raised fuel prices last month, becoming the sixth Asian country, after India, Indonesia, Malaysia, Bangladesh and Sri Lanka, to trim subsidies in the face of rising global prices.
The government has ordered state-owned banks to continue lending to fuel importers and promised to cover all the losses incurred, estimated to reach $2.7 billion in 2008 if crude prices stay above $130, to ensure undisrupted supply.
The country’s retail gasoline price now stands at $0.90 per liter and diesel at $0.86 per liter.
Petrol prices in the Southeast Asian country of 86.5 million have nominally been deregulated since mid-2007, but importers still need government approval when setting end-user prices and are effectively restrained from changing prices too often.
Thanhnien
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