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Economy News
Tax cut to help hold line on petrol prices
HA NOI (VNS)— The two ministries of Finance, and of Industry and Trade decided yesterday to reduce the import tax rate for petrol and oil instead of increasing petrol and oil retail prices on the domestic market due to higher world oil prices.

The new rate dropped by 2 per cent, from 12 per cent to 10 per cent, to keep retail prices stable at VND23,650 (US$1.12) per litre for A92 petrol and VND21,800 per litre for diesel oil.

The two ministries also decided that petrol and oil traders would get compensation from the price stabilisation fund for their losses due to increases in the world market with rates of between VND550 and VND600 for a litre of petrol, fuel oil and diesel oil.

On August 28, petroleum importers added VND650 per litre to the existing retail prices for petrol and said that they still suffered losses of VND450-760 per litre.

Recently, local petrol dealers submitted a proposal to the Finance Ministry to increase retail petrol prices by VND1,000 per litre and oil prices by VND1,300 per litre.

The dealers said the petrol price in the Singapore market has remained high at US$122.39 a barrel while the diesel price was $136 a barrel. Therefore, they had experienced losses, and that this was what led it to propose that the ministry increase retail prices after 10 days of the previous rise.

This was the fifth consecutive time that petroleum importers proposed a price increase to the ministry. If it is approved, the new retail price would set a new record of more than VND24,000 per litre.

Before prices of petrol and oil surged, some petrol stations closed to wait for the new retail prices of petrol and oil.

The last two times petrol and oil retail prices increased, 220 petrol stations closed, Truong Quang Hoai Nam, head of the ministry's Market Watch Department, said at the Industry and Trade Ministry's meeting with industry and trade departments on Monday.

But 140 out of the 220 petrol stations closed because they could not supply petrol and gas in a timely way and the remaining closed due to objective factors, including mechanical problems and electricity cuts, Nam said.

The department asked its 33 sub-departments nationwide to hold investigations into deficiences in the petrol and gas supply, said Nam, adding that results of the investigations were expected to be released next week.

In the first eight months of this year, the department investigated 5,655 cases of violation and revoked the business licences of 32 petrol and oil trading shops that violated existing petrol and oil trading regulations.

Gas price up

Meanwhile, gas traders said the current price of gas on the world market rose by $50 per tonne to $1,000 against the price early this month.

If the price remains high by the end of this year, the domestic gas traders would increase the retail price on the local market by VND15,000 per 12-kg tank of gas to VND433,000.

On September 1, the local gas price surged by VND51,000 per 12-kg tank to VND418,000. — VNS

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