The Ministry of Finance is weighing a proposal to raise gasoline pump price and reduce import tax on petroleum products, as global crude oil price has soared recently.
Crude oil for May delivery reached US$65.88 a barrel on the New York Mercantile Exchange late Monday, an official from Ministry of Finance said.
Escalating tensions between Britain and Iran over the Iranian capture of 15 British sailors caused crude oil to hit seven-month record high, he added.
The Vietnamese Ministry of Finance is considering two options to cope with high world oil prices.
The first is to either reduce import tariffs on petroleum products to 5 per cent from the current 10 per cent, or increase retail prices of petrol by VND500-1,000 a liter. The second option consists of both a tax cut and a price rise.
In early March, the ministry raised gasoline pump price by VND900 a liter and decreased the import tariff to 10 per cent from 15 per cent, when global crude oil exceeded US$60 a barrel.
A liter of A92 gasoline is now VND11,000.
Under the current rule, the government fixes petroleum product retail price, not traders, who are only responsible for importing refined oil to sell in the country. Losses from petroleum sales are compensated by State coffers.
The government pledges to hand price-deciding authority to oil traders at a suitable time.
Petrol sales subsidies are expected to be put to an end this year or next year, while aid for oils (diesel oil and kerosene) will be eradicated later.
However, any change must ensure benefit to the State, oil traders and consumers as well as energy security and national economic sustainability, an official said.
Vietnam was estimated to consume nearly three million metric tons of refined oil worth US$1.4 billion in the first three months of 2007, up 13.6 per cent in volume and 13.2 per cent in value. (VnExpress)
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