3:26:42 PM | 7/8/2005
Pressures to increase domestic retail prices of petroleum products is growing as the global price continues to rise, according to energy officials.
Bui Ngoc Bao, deputy director of the State-run Vietnam National Petroleum Corp. (Petrolimex), said many key fuel importers had been operating at a loss due to the world price hike, and as a result, they faced pressure to increase prices of gasoline in the local market.
According to the Ministry of Trade, prices of oil on the world market have escalated in recent days to over US$60 per barrel. At this high, key petrol importers nationwide could suffer losses of more than VND60 billion (US$3.79 million) a day.
Bao said Petrolimex, which accounts for 60 per cent of the country's total petrol market, has withstood an average loss of VND28 billion (US$1.77 million) a day for the last five days.
He attributed the world petrol price hike to political instability in the major oil producing countries, the rapid growth of the global economy and oil refineries' failure to meet the increasing worldwide energy demand.
He said Vietnam’s petroleum importers, all state-owned, would be certain to adjust the retail prices, since the Government has already stopped providing petrol subsidies. Currently, the Government fixes retail prices of all petroleum products.
Deputy Minister of Finance Truong Chi Trung said the petroleum import tariff had already been brought down as low as possible and stressed the need to alter the retail price.
According to the Ministry of Finance’s Price Management Department, A92 gasoline is retailed at VND8,000 a liter in the Vietnamese market compared with VN10,300 in Cambodia and VND13,787 in Singapore.
The wide difference in the regional price of petroleum products has led to increasing gasoline smuggling across Vietnamese borders.
Bao said the petrol price adjustment was essential, but added that it needed careful calculation in order to avoid an adverse impact on the national economy.
Bao also stressed the need to build a petrol policy in accordance with the country's global integration plan and accounting for the focal fuel price should be determined by the world market price.
Deputy head of the Market Pricing Research Institute Ngo Tri Long also believed the world oil price would continue its climb, and agreed a price adjustment was vital. He suggested the timing of the hike be kept secret to prevent potential hoarding of petroleum products.
The oil price increase was certain to affect the cost of commodities and services, especially for energy-consuming industries such as transport, electricity and coal, he added.
Vietnam, the sixth largest crude oil exporter in Asia, has to import nearly all petroleum products to feed its energy demand as it lacks major refining facilities.
The southeast Asian nation imported 4.85 million metric tons of petroleum products valued at nearly US$1.88 billion in the first five months of this year, up 36.2 per cent on-year in terms of value, according to statistics from a government agency.
In the meantime, it earned nearly US$2.82 billion from exporting nearly 7.33 million metric tons of crude oil in the first five months, up 37.9 per cent in value but down 9.1 per cent in volume on-year, it said.
VNS
Vietnamese
