Vietnam to let market forces determine oil prices

Vietnam issued Decision 187 in April that would allow petrol stations for the first time to freely set pump prices based on market forces. Though officials reserve the right to intervene in case of suspected collusion or other market abnormalities, the Ministry of Trade said the decision will allow local prices to more closely reflect global trends. Oil prices have, until now, been managed and subsidized by the government. However, volatility in international crude oil prices has forced the government to make the decision to withdraw from giving subsidies for local prices of petroleum products. The government has set up a time line for when companies will have full control over petroleum prices. Retailers will set prices on octane 95 and 93 gasoline on May 1, heavy oil in late 2007 and diesel fuel in 2008. The exact dates will be decided by the Prime Minister, according to Minister of Trade Truong Dinh Tuyen. A special group to monitor prices and police the market has also been created by the government. (April 10, 2007)