Ministries deny fuel price hike request for 3rd time

March 08, 2014 | 09:35

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The ministries of industry-trade and finance rejected Thursday a request from fuel wholesalers for a rise in retail prices, the third refusal since January, even though the dealers complained earlier they are making a loss.

The Ministry of Industry and Trade together with the Ministry of Finance required local fuel wholesalers not to hike their prices, as they requested early this week, so as to maintain a balance between their benefits and consumers’.

The regulatory bodies also ordered them to cut their profit rates by VND200 per liter to VND100 per liter of gasoline and kerosene.

In addition, the ministries have allowed fuel wholesale agents to extract VND300, VND170 and VND110 from a petroleum price stabilization fund every time they sell a liter of gasoline, diesel, and kerosene, respectively.

Consumers are helping feed this fund in that they automatically contribute VND300 to it whenever they purchase a liter or kilogram of fuel, as that amount has been included in the retail prices.

The latest price hike request came ten days after a price increase fuel dealers announced on February 21.

The finance ministry shook its head on January 1 after fuel wholesalers asked for a price spike. Two weeks later, it said no to another price increase proposal, quoting market stabilization efforts.

Fuel wholesalers have repeatedly cited losses as the reason for their hike requests, saying they are suffering a loss of VND173-519 per liter of fuel in the most recent complaint.

A wholesaler representative once told a local newspaper that his firm has been at a loss since late February when fuel prices in Singapore surged due to the ongoing crisis in Ukraine.

Last year gasoline prices went up by 2.18 percent year on year in Vietnam although they slumped six times in total.

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