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Fuel fund dries up, price may rise again
A national fund earmarked for subsidizing fuel firms is running out of cash so fuel prices could be hiked again, newswire VnExpress quoted Nguyen Tien Thoa, Director of the Ministry of Finance's Department of Price Management, as saying.
The Ministry of Finance reported that VND83 billion (US$4 million) is left in the fund while fuel wholesalers has claimed it is VND1.35 trillion ($65.2 million) in the red.
The Vietnamese government has set out the fund to offset losses incurred by fuel companies in a bid to control domestic prices and contain inflation.
The companies currently suffer a loss of at least VND2,000 ($0.09) on every liter of gasoline despite this financial support, Thoa admitted.
He said the government has done its best to stabilize fuel prices, exemplified by an import tax cut to 2-5 percent, so it is going to adjust the prices in the coming time.
A hike, if any, will only be implemented if all benefits of the companies, consumers and the government have been taken into account, he asserted.
The government and taxpayers have spent VND11 trillion ($531 million) on subsidizing the fuel sector, of which VND7.5 trillion ($362 million) comes from tax cuts and the rest from the aforementioned fund.
The finance ministry last Thursday allowed fuel companies to withdraw more money from the fund to make up for the discrepancy when global prices rose. But those firms still get hurt since the world’s prices increases so fast, worsened by a volatile forex rate.
Gasoline is now sold at VND16,400 ($0.79) per liter while the input cost averages a whopping VND19.177 ($0.93) a liter taking into consideration tax, storage, interest payment, commission, among other fees.
A source close to Petrolimex, or the Vietnam National Petroleum Corporation, revealed the fuel firm suffered a loss of VND2,500-3,000 ($0.12-0.14) per liter at some time during the past six months while an average loss ranges VND1,000-1,500 ($0.05-0.07).
Many accordingly reduced imports, which caused a shortage of gasoline supply and led to the closure of many gas stations last year.
The global prices have sharply risen so gasoline importers will be put under considerable pressure if the retail price is not raised, the source said.
It is now over to the authorities, it concluded.
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