Vietnam raises petrol prices by 9 percent
HANOI - Vietnam has raised petrol prices by nine percent in response to soaring world oil prices, the finance ministry has said, denying the hike would add to inflationary pressure.
State-set petroleum retail prices now range from 11,600 to 12,000 dong (0.72-0.75 dollars) per litre. Diesel prices also increased by 700 dong, to 8,600 dong (0.53 dollars) per litre from late Wednesday.
The ministry blamed the second price increase this year on recent hikes in world oil prices, where the Middle East conflict and BP's Alaska pipeline leak have contributed to pushing the barrel above 76 dollars.
"In the first seven months of the year, the state had to spend 6,800 billion dong (425 million dollars) to compensate for losses in petroleum trading," said the ministry in an online statement.
Vietnam has rich oil and gas reserves in the South China Sea but lacks a functioning refinery and has to import all its refined petroleum products. All oil trading enterprises in the communist country are state-run.
Deputy finance minister Tran Van Ta blamed the price rise on "force majeure."
"We are integrating into the world economy and we cannot... independently set the price," he was quoted as saying by the Thanh Nien newspaper.
The rise "will not have a big impact on the macro-balance of the economy," Ta said. "It will neither increase the price index, influence the economic growth nor cause turbulance for production and people's lives."
Vietnam's year-on-year inflation rate rose 7.5 percent in July. The government wants to keep inflation at or below 8.0 percent this year.
Its receipts from crude oil exports from January to July reached 4.92 billion dollars but Vietnam also spent 3.66 billion dollars on refined oil products imports, the government said.
Agence France Presse - August 10, 2006.
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