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Consumers set for more pain as fuel prices rise
The Ministry of Industry and Commerce has announced an increase to fuel prices for the eighth time this year, with prices rising in Vientiane and five provinces from Friday.
The price of petrol in Vientiane has risen by 360 kip to 390 kip per litre, and by 360 to 410 kip per litre in the five provinces, according to a report from the ministry's Price Planning and Marketing Division yesterday.
The government will do its best to keep the prices of diesel and regular petrol at 10,000 kip and 11,000 kip per litre respectively as a short-term measure to stabilise rising inflation, a senior official from the ministry said recently.
The measure includes the government increasing the tax on premium petrol so as to subsidise diesel, which would help to counter rising inflation.
In Vientiane, petrol stations are now selling premium petrol for 12,200 kip per litre, regular petrol for 11,000 kip per litre and diesel for 10,060 kip per litre.
Fuel prices vary between the provinces of Khammuan, Savannakhet, Champassak, Bokeo and Xieng Khuang depending on transport costs.
In those provinces, premium petrol now costs 12,220 to 12,340 kip per litre, regular petrol 11,050 to 11,290 kip per litre, and diesel 10,060 to 10,390 kip per litre.
Bus operators have vowed to raise ticket prices if the cost of diesel reaches 11,000 kip per litre.
Officials believe a lower diesel price would result in lower production costs because the fuel is widely used to manufacture and transport goods.
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. However, there has not been any downward adjustment to prices this year.
Fuel prices fluctuate in Laos depending on shifts in the global market. According to the Brunei Times recently, the price of crude oil will hit US$120 a barrel this year.
Singapore AP reported yesterday that oil prices rose to near US$113 a barrel on Monday in Asia after Libyan rebels said they won't produce crude for at least a month as they repair fields damaged in fighting.
According to the Lao Petroleum and Gas Association, oil was at about US$78 per barrel in January last year and fell to about US$75 by the middle of the year. But it rose to US$89 per barrel by the end of last year.
Fuel consumption in Laos is expected to rise to more than 750 million litres this year, amid spiralling global oil prices. Consumption increases about 7 to 10 percent each year. Laos used over 640 million litres in 2009 and more than 700 million litres last year.
About 45 to 50 percent of the fuel Laos imports is used in Vientiane and Vientiane province.
vientiane times
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