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Rising fuel costs put pressure on cement, steel prices
Construction material producers are having to absorb higher transport costs after the government announced the third increase in fuel prices this year.
“Cement prices have not gone up even though we're having to pay increased transport costs,” the Cement Producers' Group Secretary Mr Inpone Phathananoulack said yesterday.
The group now pays 95,000 kip per tonne instead of 85,000 kip for transport from Vangvieng district in Vientiane province to the capital.
“If we don't pay this new amount the truck owners will stop working,” Mr Inpone explained.
“We have to pay them more because the price of fuel has a direct impact on their daily lives, especially the increasing price of food.”
Group members have not raised their prices because they don't want to reduce demand during the construction season.
“We will keep cement prices at their current levels until fuel prices go up a lot higher than they are at the moment,” Mr Inpone 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 been selling at these prices since May last year.
However, some steel producers have adjusted their prices upwards to compensate for the high price of fuel.
A major steel producer, Silimungkhoun Steel Industry Factory, in the Xaythany district special industrial zone, previously sold steel for about 6 million kip per tonne but has recently had to raise its price.
“Production and transport costs are both affected by fuel prices. This latest increase is sure to have an impact on my business and other operators also,” said factory owner Mr Thaithavy Silimungkhoun.
In Vientiane, petrol stations are now selling premium petrol for 10,970 kip per litre, regular petrol for 9,870 kip per litre and diesel for 8,550 kip per litre. The petrol price rise varied from 60 to 130 kip per litre around the country.
There were 14 fuel price adjustments by the government last year, 10 of them increases. That followed 15 adjustments in 2009, of which 11 were rises.
Fuel prices fluctuate in Laos depending on shifts in the global market.
Singapore AP reported on Friday that oil prices rose above US$87 a barrel Friday in Asia as Egyptian President Hosni Mubarak clung to power amid growing protests calling for his resignation. Benchmark crude for March delivery was up 30 cents to US$87.03 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 2 cents to settle at US$86.73 on Thursday. In London, Brent crude gained 49 cents to US$101.93 a barrel on the ICE Futures exchange.
vientiane times
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