Ministry maintains fuel prices, cuts import taxes

September 12, 2012 | 15:44

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The fifth consecutive fuel price hike within two months, as feared by local consumers, has not occurred, at least for now, as the Ministry of Finance Tuesday ruled to keep fuel retail prices at the current rate, only slashing import duties for all commodities but gasoline instead.

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Retail prices of A92 and A95 gasoline thus remain at VND23,650, and VND24,200 per litre, respectively, while the rates of kerosene and diesel remain fixed at VND21,940 and VND21,950 per litre. (VND20,860 = $1)

The announcement partly eased public concern as, earlier this week, four wholesalers demanded to increase the A92 gasoline price to an all-time record high of VND24,450 a litre.

The ministry also slashed the import duties levied on diesel, fuel oil and kerosene by 2 percentage points, while maintaining the rate of gasoline at 12 per cent.

Specifically, the import tax of diesel went from 10 per cent to 8 per cent, and fuel oil and kerosene from 12 to 10 per cent.

Local wholesalers are also allowed to deduct VND500 from the fuel price stabilisation fund on every liter of fuel they sell to recoup for the loss caused by soaring global prices, the ministry said.

“The fixed profit of VND300 a litre will no longer be included in the cost price calculation of wholesalers, in order to share the difficulties with consumers,” the ministry said in a statement.

The fixed profit is granted to wholesalers, so that whatever the retail prices are, they will have a VND300 profit per liter.

Average world price in the last 30 days is some $123 a barrel, up by 7 per cent compared to the previous 30-day period, the ministry said in reasoning for its adjustment in fuel price management.

Local wholesalers now suffer a VND895 loss on every litre of A92 gasoline, while the respective rates for diesel oil, fuel oil and kerosene are VND1,366, VND1,219, and VND1,415 a litre.

Gasoline prices have been increased four times since July 2, going from VND20,600 to VND23,650 in the latest hike on August 28.