Petrol Price Stabilization Fund Hoped to Freeze Rates in 2008

Vietnam may keep local petroleum prices unchanged through the end of this year if the planned petroleum price stabilization fund comes into operation soon, said Mr. Nguyen Cam Tu, Minister of Industry and Trade at a meeting March 24 in Hanoi on the matter.

 

The operation of the fund is essential to Vietnam in the circumstance of continuous global price fluctuations, he attributed, adding that the government has assigned the Ministry of Industry and Trade and Vietnam National Petroleum Corp (Petrolimex) to build the fund.

 

Under the fund’s rules, If Vietnam defines selling prices of petroleum based on the global rate of US$105 per barrel, the local rates should be kept unchanged though June this year in accordance with the Prime Minister’s recent demand, Tu said.

 

“The state’s goal is to stabilize petroleum prices in order to curb inflation and ensure energy security as Vietnam is in the progress of a market-oriented economy under the management of the government,” the minister noted.

 

Petroleum trading firms should keep local rate stable for a particular period and only adjust in favorable circumstances despite global price changes. The government will extract finance from the petroleum price stabilization fund to compensate for oil sales while losses of gasoline trading will be offset by profits in other periods.

 

Local petroleum traders said that they faced losses worth VND3,561 billion (US$22.56 million) due to petroleum imports in the first two months of this year, Tu said. (Saigon Liberation, Young People)