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Govt launches 70 kip per litre fuel surcharge
The government has added an extra 70 kip per litre to fuel prices to recoup lost revenue from the elimination of bridge tolls, according to a high-ranking government official on Monday.
Minister of Industry and Commerce Dr Nam Vinhaket told Vientiane Times yesterday that the government imposed the fuel surcharge on October 1 after determining it was a suitable starting date.
“As the fuel price continued to drop we decided to start applying a fuel surcharge,” he said. “But if it increases again to our ceiling level of 11,000 kip per litre, we will remove the surcharge.”
The government issued a notice to eliminate tolls at 29 bridges across the country earlier this year as it wanted to remove barriers to commercial traffic.
Dr Nam said trade boosts economic growth and enables local people to lift themselves out of poverty so any barrier to trade has a major impact on the country's overall development.
The decision to remove the bridge tolls was made when the fuel price was above US$100 per barrel, so the government waited for the price to go down before adding the surcharge.
Then the government assigned the Ministry of Industry and Commerce to study the possible impact of the fuel surcharge on production costs and inflation.
The Ministry of Public Works and Transport reported that since the removal of the bridge tolls the transport sector has lost about 4 billion kip per month, which previously went directly into the Road Maintenance Fund.
The fuel surcharge will make it easier for the government to collect revenue, but there is a concern that the increased fuel price will affect everyone, particularly low-income earners, rather than the relative minority who use the bridges.
Every year the government spends about 300 billion kip from the Road Maintenance Fund to repair roads across the country, but this figure excludes the money spent repairing roads damaged by natural disasters.
This year flooding and landslides triggered by tropical storms Haima and Nock-Ten caused about 695 billion kip in damage to roads.
The fuel surcharge will enable the government to continue repairing these roads.
The bridge tolls came into effect several years ago. Cars, trucks and other vehicles were all charged fees, while motorbikes and three-wheel vehicles were excused. Now everyone will have to pay the fuel surcharge.
Oil stood at US$88 a barrel on Monday in Asia after jumping to a record high near US$145 a barrel in July 2008.
In Vientiane, diesel and regular petrol are sold at 9,190 kip and 10,580 kip per litre respectively.
In Champassak province diesel is sold at 9,250 kip per litre and regular 10,620 kip per litre, while in Xieng Khuang province diesel is 9,480 kip per litre and regular 10,840 kip per litre.
In Bokeo province, diesel is sold at 9,310 kip per litre and regular 10,710 kip per litre.
vientiane times
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