Vietnam Mulls over Monthly Adjustment of Petrol Prices
Ministries of Trade and Finance are seeking government approval for a plan to monthly adjust retail prices of petroleum products in Vietnam in order to gradually abolish State subsidies and better serve local consumers, according to State media.
Management bodies will base their prices on the average import price of a certain month and the latest import price level to allow local petrol importers to impose new prices in the following month and decide retail prices for consumers.
Vietnam now must import all petroleum products to meet local demand, therefore the world prices seriously affect the country’s economy. The government often raises import tax when the world oil price falls and reduces the tax when the world price rises.
It now finds it hard to control the price in the context of global integration, so the country must move towards market-oriented adjustments, according to the Finance Ministry.
If it succeeds in this way, Vietnam will adjust the price weekly and gradually hand over authority to enterprises to decide the price, the ministry said.
At present the country is applying a similar mechanism of monthly adjusting the retail price of gas.
Vietnam will be in need of 15-16 million tons of petroleum products in the 2006-2010 period and 26-28.6 million tons in 2020. To meet this demand, the country must import a large volume of these products. Its first oil refinery is now under construction.
Vietnam imported 950,000 tons of petroleum products in January of 2006, up 1.8 per cent on-year. The country plans to import 13 million tons in 2006, up 8.4 per cent from last year.
Youth
Vietnamese
