Fuel subsidy causes rampant illegal exportation

In the second half of 2006, Vietnam’s state budget will disburse VND8,000-9,000 billion (US$499.69-562.15 million) to subsidize sales of petroleum products in the country, Deputy Minister of Finance Tran Van Ta said. The subsidy makes retail prices of petroleum products in Vietnam some 20% lower than neighboring countries, in turn causing rampant illegal exportation. Though Vietnam produces crude oil, it is totally reliant on petroleum product imports, as it currently has no oil refining facilities. Its first refineries are expected to begin operations by 2009 when Vietnam opens its petroleum market to foreign investors. (July 18, 2006)