Fuel price hike takes consumers by surprise

The permit, allowing the wholesalers to raise the prices of the respective petroleum products by VND584, VND384 and VND635 per liter at maximum starting 2:00 pm on Wednesday, set the ceiling rate of those petroleum products to VND24, 214, VND22, 404 and VND22,639  per liter.

The price of heavy oil remained unchanged, according to the written decision issued by the ministry.

The move took local consumers by surprise as the Prime Minister asked state management agencies, including the Ministry of Finance, to maintain price stability for the coming New Year and Lunar New Year holidays in a regular government meeting on December 2.

Petrolimex, accounting for over 50% local market share, said it adjusted the retail price of 92 RON gasoline to VND24,210 per liter, followed by Vietnam Oil Corporation (PV Oil) with the same rate.

Along with the price increase, the state management agency also required petroleum businesses to stop taking the money from the petroleum price stabilization fund which is fed by local consumers. The retail gasoline price included a small amount that will be channeled directly into the fund.

According to the agency, world oil prices have continuously increased over the last 30 days and maintained at a high level. This development makes the base price higher than the domestic retail price by VND914-1,414 per liter. As of December 10, the balance of the local price stabilization fund was at VND72 billion in total, of which that in 7 petroleum wholesalers were negative.

Earlier, in November and early December, the Ministry of Finance has also repeatedly informed about the rise in world oil prices, causing losses for those enterprises. To ensure price stability then, the price regulatory agencies allowed those businesses to increase the amount of money they could take from the stabilization fund.

After the most recent price adjustment decision, gasoline prices have increased 5 times in 2013, alternating with 6 decreases. The last increase was on July 17 when gasoline hit the highest rate in history - VND24,570 per liter of RON 92.