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August 15, 2008

Vietnam lowers retail fuel prices by up to 5.3%
Vietnam has on Thursday lowered retail petrol prices by up to 5.3 percent in an effort to spur consumer spending while world oil prices drop, said Reuters.

Vietnam, Asia’s second largest importer of petrol and diesel, has been battling inflation running close to 30 percent, triple the levels seen in October last year.

After the price cuts, the most popular 92-octane petrol grade now retails at 18,000 dong ($1.09) per litre, down 5.3 percent, while 95-octane grade has been cut 4 percent to 18,500 dong ($1.12) per litre, the ministry announced at a briefing on Thursday. Diesel was left unchanged at 15,950 dong per litre, the country’s top importer and retailer Petrolimex said in its price list.

Importers, which are all state-owned, said even at the lower prices they would still make a profit of about 4,500 dong per litre of the 92-octane petrol thanks to the 20 percent fall in crude oil CLc1 from its record high in July.

The Vietnamese government also pledged to keep waiving gasoline import tariffs and maintain a partial subsidy on diesel to help contain soaring inflation.

“The price adjustment is in line with world price movement and aims at minimalising the adverse impact from high fuel prices on production activities and people’s lives,” the country’s finance ministry was quoted by Reuters as saying in a statement.

“The reduction will help relieve the pressure to increase prices,” the statement said.

The government said oil products prices directly contributed about 2.58 percent to the consumer prices basket.

The impact of Thursday’s fuel price reduction will not be seen in August’s monthly inflation data because the government statistics agency says it stops taking price details on the 15th day of each month to calculate the consumer price index.

August’s inflation data, expected to be released during the last week of this month, would reflect the impact of the July 21 fuel price hike.

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