Coal prices will be raised for domestic producers of paper, fertilizer and cement, under a decision by the Finance Ministry Tuesday to limit coal exports and boost coal traders’ revenues, state media reported.
Under the decision, from the second quarter of 2009, domestic coal rates will not be set by the government but will fluctuate according to supply and demand.
Coal dust for the three makers will be also increased so as to offset coal production costs.
Particularly, phosphate and nitrogenous fertilizer producers will pay 81 per cent of the cost of production of coal piece from first half of this month.
The ministry also decided to temporarily remain coal prices for electricity production. However, coal rates will be adjusted according to the power price hike roadmap.
Currently, the four producers of paper, fertilizer, cement and electricity are paying between 38 per cent and 79 per cent of the coal production cost, just equal to 30 per cent-60 per cent of retail prices for individual consumers and much lower than export prices.
Coal producers are trying to offset their losses from selling to domestic industries by boosting coal exports.
This situation is “irrational” and may affect national energy security, the ministry said.
Vietnam is forecast to have to import coal in 2012, after exporting 20 million tons a year over the past few years.
In a move to curb inflation and stabilize domestic prices, the government had ordered state-owned Vietnam National Coal-Mineral Industries Group (Vinacomin) and other coal traders to freeze coal selling prices from January this year until this month. (Local sources)
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