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Fuel prices not cut despite traders’ big profits
Fuel prices in Vietnam are higher than in neighboring nations and oil companies are making big profits, the Ministry of Industry and Trade admitted at a meeting in Hanoi on Jun 06.
Global oil prices have fallen to below US$100 a barrel and there is public demand in Vietnam to cut retail prices but the a Ministry of Finance official told Tuoi Tre his ministry would await further developments before making any price adjustments.
The government decided in March that oil prices would be adjusted based on market movements.
Following the surge in global prices in the last few months, the government cut import tax to zero on February 24 while keeping prices steady to share the loss with the oil firms.
Thus, the official said, “If the world price goes down, we will reimpose the import tax first, and reduction of retail prices will be considered after that.”
Meanwhile, oil distributors and retailers are making hefty profits. A wholesale trader told Tuoi Tre that he made a profit of VND700 on every liter of diesel.
Bui Ngoc Bao, CEO of the Viet Nam National Petroleum Corporation, or Petrolimex, said his firm made “a considerable profit on diesel and a little on gasoline.”
The commission for retailers has been hiked.
A Ho Chi Minh City retailer told Tuoi Tre that it gets a commission of VND600-700 on a liter of gasoline and VND700-800 on diesel.
The retailer admitted this was extremely high since VND400-500 was enough to earn big profits.
However, the industry had incurred massive losses when global prices surged since the government wanted to keep prices stable, refusing to allow a price hike for a month, merely cutting the import tax.
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