Vietnam to phase out fuel subsidies

The public should prepare for a coming petroleum price hike, said Vietnam Deputy Industry and Trade Minister Nguyen Cam Tu, as the state will soon phase out oil subsidies and relegate pricing to market-driven mechanisms. Because of state price controls, there has been no change in the price of diesel and mazut, a heavy, low quality fuel oil, on the domestic market since 2006, and the price of gasoline only increased by 1.6% in 2007 to VND11,300 (US$0.7017) per liter from VND11,125 (US$0.6908) in 2006. He explained that petrol businesses might soon be unable to continue importing the product after banks refused to extend them further credit due to their failure to repay outstanding loans. (November 23, 2007)