The Ministry of Finance is mulling over a plan to lower retail petrol prices as petroleum traders are making profits of VND1,700 (USD0.08) per litre.

Government plans to lower petrol prices

Minister of Finance Vuong Dinh Hue said the ministry planned to lower retail petrol price and raise import taxes. There are signs of a fall in petrol prices on the world market but it these trends will be monitored prior to any decision being made.

Hue said the government did not intent to lower the price now since prices had decreased just nine days ago, while fuel storage periods range up to 30 days. On May 9, the inter-ministerial finance, industry and trade committee lowered the retail petrol price by VND500 (USD0.024) per litre, while increasing import taxes from 0% to 2-3%.

If the world prices continue to fall, the Ministry of Finance will consider lowering the domestic price and increase taxes further. If the prices remain as they, the ministry will consider policies to help poorer households.

A92 petroleum world prices fell to USD114.45 on May 18, 6.4% down compared to the early May. According to experts, if enterprises import petrol right at time they would pocket profits of VND1,700 per litre.

"The government will have to increase petroleum import taxes and reduce prices as a way to balance the interests of businesses, the government and consumers." the economist Ngo Tri Long said.

According to Resolution 84, the minimum time between two price adjustments is 10 days.