|The prices of petrol and diesel begin increasing at 2pm on Wednesday. This is the fifth hike of petrol and gasoline since early this year. —Photo xangdau
HA NOI (VNS)— The Ministry of Finance yesterday allowed petrol distributors to increase prices of petrol by a maximum of VND584 (US$2.78 cent) to VND24,214 ($1.15) per litre.
The hike began at 2pm.
Meanwhile, the price of diesel fuel was raised by VND653 per litre to VND22,963 and kerosene by VND384 to VND22,404 per litre.
The Viet Nam National Petroleum Group, which holds more than 50 per cent of the market share, reported its price hike of petrol Ron 92, which has been raised to VND24,210 per litre.
The ministry also asked businesses to stop drawing out from the nation's price stabilisation fund for petrol and diesel. Before the hike, businesses were allowed to dip into the fund to offset losses of VND200-300 per litre of petrol and diesel, respectively.
As for kerosene, businesses will continue using the fund at VND700 (3.33 cent) per litre because sales are low and businesses have been selling kerosene at a loss, with a selling price lower than the base price.
By December 10, the nation's price stabilisation fund for petrol and diesel had VND72 billion ($3.42 million).
This is the fifth hike for petrol and kerosene since early this year. There were also six price reductions during 2013.
The new price for petrol is still lower than the record price of more than VND25,000 per litre set in March this year.
Since November, the ministry had repeatedly emphasised that the petrol businesses had been suffering losses due to the world's price fluctuations.
It is estimated that 70 per cent of the petrol in the local market was imported, so retail prices depended heavily on global fluctuations.
7 per cent limit
Petroleum traders can raise retail prices if price increases are not higher than 7 per cent, compared to previous prices, according to the amended Decree No 84/2009/ND-CP on trading petrol.
Under the Ministry of Industry and Trade's draft, which is publicised on its website for recommendations, if wholesale prices increase by 7-12 per cent, traders are required to submit their price hike plans to the ministries of Finance, and Industry and Trade, for approval two days before raising prices.
In case wholesale prices increase by more than 12 per cent, the Prime Minister will decide on measures to stabilise the petroleum market.
If wholesale prices decline less than 12 per cent, traders will have to cut retail prices. If the decline is more than 12 per cent, the traders will have to continuously cut their retail price after the Government increases import taxes and raises money that the traders have to contribute to the Price Stabilisation Fund.
Under the draft, the time between each price hike will be 15 days, instead of the current 30 days. The price would be determined after considering worldwide and regional prices during 15 consecutive days. — VNS