Vietnam to Keep Gasoline Prices Unchanged in Spite of Global High

The Vietnamese Government has decided not to increase petrol retail prices for the time being although petroleum companies are suffering huge losses from the continuous rise of the price of oil in the world market, the Ministry of Trade source said.

 

“The refusal of the proposed price hike is aimed to control the inflation rate of the national economy,” Hoang Tho Xuan, director of the Trade Ministry's Policy and Domestic Market Department, said.

 

The State Budget will offset losses from petroleum sales by oil importers, all State-run, and the government will ask banks to provide foreign currency loans to ensure stable supply, he said.

 

To deal with the world oil price rise and help oil importers avoid losses, the government has scrapped import tariffs on refined oil products from April 7.

 

However, with the current global price, oil importers loses some VND1,000 on a liter of petrol, VND1,900 on a liter of diesel oil and VND1,167 on a liter of fuel oil, Tho added.

 

The present prices of RON 92 gasoline and diesel oil are VND9,500 and VND7,500, respectively.

 

In Vietnam, the Government decides the selling price of petroleum products, not oil importers, which are responsible for importing the distillated fuel to sell in the country. All losses are compensated by the State coffers.

 

Petrolimex, the largest oil importer and retailer in Vietnam, reportedly loses up to VND5 billion (US$314,000) a day in April on oil sales, up from VND3 billion (US$188,000) last month.

 

Saigon Petro, a key petroleum importer in Ho Chi Minh City, reported a loss of VND20-30 billion (US$1.3-1.9 million) in the last two weeks.

 

Each day, the State Budget disburses a whopping VND20 billion (US$1.3 million) per day on petroleum product imports.

 

Last year, Vietnam’s oil subsidy bill was VND10 trillion (US$628 million).

 

With State subsidies, lower oil prices in Vietnam have sparkled the illegal exportation of petrol to its neighboring countries, especially Cambodia.

 

In spite of being the sixth largest crude oil producer in Asia, Vietnam has to import all refined oil products as it lacks major refineries. In the first four months of this year, it imported a total 3.53 million metric tons worth US$1.81 billion, down 10.3 per cent in volume but up 22.4 per cent in value.

 

This year, the Southeast Asian nation forecasts to import 13 million tons of petroleum products, up from last year’s 11.3 million tons.