|
Steel producer mulls price changes as fuel costs rise
A local steel producer, Vientiane Industry Co Ltd, may propose an increase in official steel prices to the Ministry of Industry and Commerce if prices for regular petrol rise above 10,000 kip per litre.
Petrol stations in Vientiane are now selling premium petrol for 10,570 kip per litre, regular petrol for 9,520 kip per litre and diesel for 8,220 kip per litre after an increase in prices was announced by the ministry on Wednesday.
Currently the company supplies steel at a price of about 7.5 million kip per tonne and “we've used this price since early last year after it was approved by the ministry,” said a senior official at the company, Mr Sonesavanh Soukdala, yesterday.
However, fuel prices have increased since last year and “our profits are being pushed lower and lower,” Mr Sonesavanh said.
The company has not raised its prices because it does not want supply to impact on market demand.
“We may adjust our prices if fuel prices go above 9,000 kip per litre for diesel and 10,000 kip per litre for regular petrol,” he said.
The company has imported a raw material known as ‘billet' for US$500 to US$600 per tonne since last November and plans to order another batch of imports soon. “However, we've heard that billet prices have changed as the global oil price has increased,” he said.
The Cement Producers' Group also has no plans to raise prices for its products, despite the higher fuel prices adding to transportation costs.
“However, we will hold discussions with our members on the matter by the end of this week,” said group secretary Mr Inpone Phathananoulack.
The group expects to maintain its current prices because “we hope to avoid rumours that we're taking advantage of customers during the current construction boom,” Mr Inpone said.
To maintain current prices the group will have to increase production “to ensure that we have enough supply to keep stability in the market,” he said.
The current price of ‘green' brand cement is 680,000 to 710,000 kip per tonne and 750,000 to 780,000 kip per tonne for ‘red' brand cement. The group has sold at these prices since May last year.
The current prices offered by the group are about 30,000 kip per tonne lower than those set by the ministry last year.
Premium petrol now also costs between 10,590 and 10,690 kip per litre, regular petrol 9,560 to 9,850 kip per litre and diesel 8,260 to 8,540 kip per litre in the provinces of Khammuan, Savannakhet, Champassak, Bokeo and Xieng Khuang, There were 14 fuel price adjustments by the ministry last year, 10 of them increases. That followed 15 adjustments in 2009, of which 11 were price rises. Fuel prices fluctuate in Laos depending on shifts in the global market.
Singapore AP reported yesterday that oil prices hovered below US$92 a barrel Thursday in Asia as signs of improving US demand pushed crude to a two-year high.
Vientiane times
|
