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It’s not time to lower domestic petrol prices
The Ministry of Finance and the Ministry of Industry and Trade have decided not to lower the domestic retail prices of petrol and oil despite the downward trend on the global oil market in recent times.
At a press briefing in Hanoi on July 15, Deputy Minister of Finance Tran Van Hieu said that although global oil prices fell by between 0.8 and 8.6 percent over the past two weeks, petrol businesses still face a loss of VND179/litre on petrol and VND591/kg on mazut oil.
He explained that these businesses have to pay import tariffs of 20, 20, 30 and 25 percent on petrol, diesel, kerosene and mazut oil, plus VND1,000/litre on petrol that the Ministry of Finance (MoF) advanced to businesses to make up for their losses due to the high global oil price in 2007-08.
The MoF lent petrol companies approximately VND4,040 billion over two years to make up for losses. The businesses have so far reimbursed 38 percent of the total and they will have to pay back the remaining 62 percent in the coming months.
Mr Hieu also pointed out that existing oil and petrol prices in Vietnam are lower than those in other countries in the region.
He said that to finalise the oil and petrol trading mechanism, the MoF will submit to the government amendments to the existing decree, allowing businesses to adjust the retail price of oil and petrol to a certain extent. The new amendments will help the national price stabilisation fund to operate more efficiently and avoid possible future price hikes like the one in 2008.
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