3:26:28 PM | 7/8/2005
The Vietnam Government will likely not reduce retail prices of petroleum products in the local market despite a considerable fall in global prices, a finance official said Wednesday.
RON 92 and RON 90 gasoline prices will probably stay at VND7,500 (47.7 US cents) and VND7,300 a liter this year, said Phan The Rue, deputy finance minister.
Last year, the Vietnam Finance Ministry raised petroleum product prices three times (gasoline: three times and oil: two times) due to a soar in the world fuel price.
However, the Finance Ministry decided to augment import duties on the distillate fuel to 15 per cent from 0 per cent, effective on January 6, instead of slashing retail prices.
Rue said the government decided to pick up import tariffs in this situation to cover subsidies it provided to oil importers when oil prices soared last year.
Subsidies volume might reach tens of thousands of billions Vietnamese dong, he said. However, according to Mr. Tran Van Duc, general director of Petrolimex, oil traders are provided VND5,000 billion (US$317.86 million) from the government in 2004. The Finance Ministry also reported to lose VND4,500 billion from 0 per cent oil import tax last year.
Rue said the government is also planning to cut subsidies for another fuel product apart from gasoline. And, petroleum-trading firms predict mazut oil.
In the meantime, Rue also unveiled shortcomings in the local oil distribution network and warned domestic oil traders against fierce competition from foreign oil firms when the country become full member of the WTO.
He said Royal Dutch Shell had requested the government let foreign companies sell oil products in the domestic market.
(Liberated
Vietnamese
