Trade ministry explains fuel price hike

There are now 28 fuel importers and exporters in the country, whereas the State-run Vietnam National Petroleum Group, or Petrolimex, was once the only local fuel trading company in Vietnam, noted Deputy Minister Hai.

Local fuel prices are revised every 15 days as regulated in governmental Decree No.83/2014/ND-CP and based on the world oil market. Fuel price regulators can determine price changes after a 15-day period by using a formula.

Hai also pointed out that the State budget was not used for fuel price adjustments.

However, local fuel traders are allowed to tap the fuel price stabilization fund during certain price adjustments to bridge the gap between retail and base prices.

Fuels are among the few essential items where the local price is pegged to the world price, he said.

On March 18, the world oil price rose, followed by a local retail electricity price hike of over 8% on March 20.

The Government thus decided to allow local fuel wholesalers to tap the stabilization fund to keep local retail fuel prices unchanged, and thus prevent the prices of the two essential products from rising at the same time.

But the world oil price continued to edge up in the following 15 days, forcing the price regulating agencies to revise up the local fuel prices yesterday, April 2.

If the fund had not been used in the latest price adjustment, E5 RON92 bio-fuel and RON 95 gasoline would have soared by VND3,400 and VND2,800 per liter, respectively.