Firms propose sending fuel prices to record high

September 12, 2012 | 08:39

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Four fuel wholesalers Monday submitted their proposals to the Ministry of Finance, seeking permission to hike fuel retail prices for the fifth consecutive time since July 2, with rates proposed to reach an all-time record high.

>> Ministries OK 3rd fuel price hike in August

Once the price hike is approved, A92 gasoline will fetch the highest-ever price of VND24,450 a liter, up from the current VND23,650 a liter, and diesel, VND23,100 a liter -- a VND1,300 increase. (VND20,860 = $1)

The last two months saw a total of four fuel price increases imposed, and another hike in consideration has literally frightened local consumers.

But Nguyen Tien Thoa, head of the Price Management Agency under the finance ministry, said it is reasonable for wholesalers to call for a price hike this time.

“The reason is that global prices still remain high,” he explained in an interview with Tuoi Tre Monday.

However, an official from the finance ministry said the ministry is considering reducing import tax or using the fuel price stabilization fund to balance the interests between the government, wholesalers, and consumers.

“The final decision is expected to be made in the next few days,” he said, asking not to be named.

Fuel is currently subject to a 12 percent import duty, while the maximum rate allowed is 20 percent.

Meanwhile, Dr Le Dang Doanh, former head of the Central Institute for Economic Management, also urged the government to slash import tax to share the rising cost with consumers.

In fact, a liter of gasoline is currently subject to many taxes and fees, which are valued at as much as VND7,000, or nearly one-third of the retail price, he said.

“Another price hike will create a shock to the economy,” he concluded.