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Dealers seek petrol, gas price hike
Major petrol and oil retailers have petitioned for a further increase in pump prices on the domestic market, but economists have warned against it.
Last month, two petrol price increases totalled VND1,000 per litre, taking the price to VND12,000.
The Ministry of Industry and Trade said two major petrol retailers had sought a price increase because prices were increasing on the world market.
One of the petitioners, the Viet Nam National Petroleum Corporation, said it had been losing VND1,000 per litre for petrol, VND700 per litre for diesel oil and VND300 per litre for fuel oil for a month.
The other, the Military Petroleum Company, said it lost VND500 per litre of A92 petrol, VND800-900 per litre for diesel oil and VND1,000 per litre for fuel oil. The company sold a large volume of oil so the loss was significant.
Petrol retailers said the price on the Singapore market increased by US$5-6 per barrel (1 barrel = 117.34 litre) to $60.5 for diesel oil, $58 for A92 petrol and $313.81 for fuel oil on May 4.
They anticipated that those prices would increase further in coming months, especially in June and July.
However, economics and pricing expert Ngo Tri Long said continuing to increase the retail prices of petrol and oil at this time would have a major negative effect on domestic customers and push up the prices of goods and services.
He said requests to increase petrol and oil prices had come from only two retailers, so authorities should investigate the companies’ business situation before they approved the request. Long said he was not convinced they were making losses on trading petrol and gas.
Retailers were often quick to increase prices when the world prices went up but were slow to reduce them when the situation reversed, he said.
"The State should restrict the increase of the petrol and oil prices at this time," he said.
Ngo Thi Hong Hanh, general director of Hoang Kim Food Joint Stock Company based in Ha Noi, also said that now was not right time to increase energy prices because producers were struggling to overcome their difficulties and could not bear further costs.
Economics expert Le Dang Doanh was another who recommended serious consideration be given to the flow-on effects of a fuel price increase.
These effects could not be avoided, he said, even if the increase was only VND500 per litre of petrol, and they would have a significant impact on consumers.
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