>> Fears of inflation stirred by latest petrol price hike
>> Petroleum prices hit record highs in Vietnam
Despite the recent price falls on the global market, Vietnamese petrol traders have yet to lower their retail prices.
World oil prices have fallen to around USD100/barrel in recent days, shadowing a decrease in global petroleum prices.
However, Vietnamese petrol traders have proposed that petrol import taxes remain pegged at zero percent despite not having yet indicated any price reduction plans.
Easy to rise, hard to fall
Vietnam’s double-digit inflation rate has been largely attributed to recent petroleum price hikes, a global fall in petrol prices was thought to provide sufficient grounds for retailers to cut prices.
Analysts said that the average crude oil price in May was down 7.92% compared to a month previous, when oil stood at USD101.33/barrel on the world market. This is the first price reduction over the past nine months.
Together with the fall in crude oil rate, petroleum prices have considerably decreased. Vietnam National Petroleum Corp (Petrolimex), the country’s biggest petroleum trader, recently announced that import prices of these products in May were down by between 1% and 8.32% against the previous month.
With lower input costs, Vietnamese petrol traders have begun recording profits of around VND300 per litre of petrol and VND600 per litre of oil products.
However local traders have made no moves to adjust retail prices in June in response.
Desperate need to lower input costs
The government and enterprises had shared the burden of increased world petroleum prices with petrol traders benefiting from tax reductions, government subsidies via the petrol price stabilisation fund and higher retail prices, but in return traders were expected to cut retail prices to mirror the global fall in oil prices and ease inflationary pressures on other sectors in the economy.
