Vietnam’s new fund to help offset petrol losses

A new Ministry of Finance regulation will help stabilize Vietnam’s petroleum market with the formation of a new fund. According to the regulation that has been issued, petroleum companies can only increase their retail price by up to 500 dong (US$0.03) per liter at one time, even if global prices rise above domestic retail prices. In turn, they will receive offsets from the stabilization fund for any losses. The fund will be established with contributions of 500 dong (US$0.03) for every liter of gasoline, kerosene, diesel and related products sold by enterprises. According to the circular, the retail price of petrol will be calculated based on the fuel import price in the Singapore market, along with other input costs including freight charges, insurance fees and the stabilization fund contribution. Oil companies will also be required to cut their retail price when they make a profit of more than 500 dong (US$0.03) per liter. (March 30, 2009)