Consumers Hopeful of Lower Petrol Price on Global Fall

Vietnamese consumers are hopeful of a reduction in retail price of petrol following a recent global low, local media reported.

 

The Ministry of Finance is considering a rise on import tariff or a rebate in retail price of the distillated fuel, online newspaper VnExpress said.

 

“The ministry will be likely to double import duties to 20 per cent or decrease the price by VND500 a liter,” the source quoted a ministerial official as saying.

 

On January 8, Asian crude oil was traded at US$56.68 a barrel and a barrel of petrol was at US$62.68.

 

According to market analysts, a liter of imported petrol after adding 10 per cent import duties, 10 per cent VAT, 10 per cent special consumption tax, freight and warehousing fees and other costs totals some VND10,000. If crude oil falls to US$55-56 a barrel, oil traders profit VND1,000 a liter.

 

The current retail of A92 gasoline is VND10,500 a liter.

 

“It’s time to reduce the retail price of petrol as the price stood at VND9,500 and VND10,500 a liter when the crude oil was traded at US$58.84 a barrel and US$60, respectively,” an analyst explained.

 

A Ministry of Finance official said yesterday that he advocated the price cut in order to address the rising prices of other commodities.

 

However, the decision is dependent on the Ministry of Finance and Ministry of Trade.

 

At present the Vietnamese government fixes the selling price of petroleum products, traders themselves only sell imports from the nine State-owned oil firms.

 

Recently, the Vietnamese government announced that it will widen the application of the market mechanism to the oil market.

 

Vietnam plans to import 13.5 million tons of petroleum products this year, up some 21 per cent on year. In 2006, it imported 11 million tons valued US$5.85 million, down 3.8 per cent in volume but up 16.4 per cent in value.

 

Without refining facilities, all refined oil sold in Vietnam is imported.

 

The following table is the timeline of the petroleum price movement in Vietnam in recent years.

 

Date	Global price of crude oil (USD/barrel)	A92 petrol (VND/liter)
07/03/2005	49.50	8,800
08/17/2005	63.25	10,000
11/22/2005	58.84	9,500
04/27/2006	70.97	11,000
08/09/2006	76.35	12,000
09/12/2006	63.76	11,000
10/06/2006	60.00	10,500

(VnExpress)