Further petrol price decrease not yet planned

VietNamNet Bridge – The world’s oil prices have been steady at low levels, as the retail petrol prices in regional countries have been decreasing. Meanwhile, Vietnamese petrol importers and distributors say they still have not planned any further price cuts.

A representative from Petrolimex, the biggest petrol importer and distributor, said that with the current price level in the world, it is not likely that the retail price will be slashed further, or that it will suffer a loss. In October and November 2008, Petrolimex did not lose any money with the price decreases, but it could not fulfill their plan to earn money to be paid back to the state budget.

 

Petrolimex planned to pay VND 200 billion to the state budget, but it paid only VND 170 billion.

 

Officials from the Price Control Agency, under the Ministry of Finance, also said that the current retail petrol price has been set after thorough consideration, and that there is not likely to be further price decreases with the current oil price in the world.

 

How about the petrol prices in regional countries? In Malaysia, the RON97 petrol price in the country is now at ringit 2.55/litre (equal to VND 11,950/litre), while diesel price is at ringit 2.5/litre (VND 11,716/litre). The Government of Malaysia will not let the petrol price exceed ringit 2.7/litre (VND 12,653/litre) in 2008.

 

In China, the petrol price is now at yuan 5.9/litre (equal to VND 14,611/litre), while the diesel price is yuan 6.02/litre (VND 14,909/litre).

 

Some privately-run petrol companies in China are planning to lower retail prices. The Government of China is planning to impose an import tax on petrol products, estimated at 30%, and lower the retail petrol price by 20%.

 

A question has been raised is that why does Vietnam not slash petrol prices, while other countries in the region are.

 

Truong Dinh Tuyen, former Minister of Trade, said that it is very difficult to compare the petrol prices in Vietnam to other countries, adding that the retail price depends on countries’ policies, including the tax scheme and fees.

 

In Vietnam, the petrol price is now bearing various fees and taxes, including a 25% import tax, 10% luxury tax, 10% VAT, VND 500/litre in fees and VND 1,000/litre to pay back to the state budget.

 

As such, a representative from a petrol company said, nearly 50% of the sale price of one litre of petrol goes to the state budget. He added that the petrol price depends on how much the state budget wants to collect from petrol sales.

 

An official from the taskforce on domestic market regulation said that the petrol price also depends on the market characteristics of countries. The countries with a long lasting market economy will see the prices go up and down sharply, while the countries where the subsidization scheme still exists, the petrol will not go up too sharply when the world’s prices go up, and will not go down quickly when the world’s prices go down.

 

P.V

Update from: http://english.vietnamnet.vn//biz/2008/11/814667/