Vietnam vows to keep fuel prices stable

Vietnam has ruled out fuel price hikes for the remainder of the year, signaling that it will put the fight against double-digit inflation ahead of worries about the cost of subsidies. Prices of petrol, diesel, power, coal, steel and fertilizer “will not be raised in the remaining six months of 2008,” Deputy Industry and Trade Minister Bui Xuan Khu said in a government report in July. Hanoi raised fuel prices by one-third for diesel fuel and 11.5% for petrol in February, the first hike in three months, but they remain well below global levels. The government has ordered state-owned banks to continue lending to fuel importers and promised to cover all the losses incurred, estimated to reach US$2.7 billion in 2008 if crude prices stay above US$130, to ensure undisrupted supply. Vietnam’s retail gasoline price now stands at US$0.90 per liter and diesel fuel at US$0.86 per liter. (July 9, 2008)