The Ministry of Finance has agreed that from Feb. 11, petrol wholesale traders would receive more money from the fuel price stabilisation fund to retain stability on the domestic petrol market as the world price of oil has increased to around 105 USD per barrel.

According to official letter 1786/BTC-QLG issued on Feb. 10, the new rate increased by 450 VND per litre to 1,650 VND for petrol, by 700 VND per litre to 2,300 VND for diesel and to 1,400 VND for fuel oil and by 950 VND per litre to 2,150 VND for kerosene.

The Ministry of Finance has clarified that the fuel price stabilisation fund has not run out of money.

It said 1.97 trillion VND remained in the fund and would help keep fuel prices stable until the end of February.

However, oil companies have been claiming that just 551 billion VND was left in the fund.

Launched in 2009 by collecting a 400 VND surtax on every litre of petrol sold, the fund has been governed by the Ordinance on Price.

The mechanism limits the number of times oil prices may be raised in a year.

Oil companies can increase retail prices by 7 percent if world prices rise by a similar amount within 30 days. If global prices rise by 7-12 percent, they are permitted to increase prices by 7 percent plus 60 percent of the surplus. The difference will be made up by using money from the fund.

If prices rise by more than 12 percent, the Government will cut the import tax.

Petrol wholesale traders have been complaining recently that they incur a loss of 2,400 VND on every litre they sell.

The Vietnam National Petroleum Corporation (Petrolimex) said the price of a barrel of A92 petrol had surged to 105.4 USD.

After adding expenses, the domestic retail price should be set at 18,461 VND for a litre of petrol to break even but traders have to sell at 16,400 VND, a loss of more than 2,000 VND.

Claiming the subsidy from the fund fails to make up this loss, some companies have reduced commissions for retailers, causing petrol stations to stop or cut sales.

Tuoi Tre (Youth) newspaper quoted a Ministry official as admitting that some petrol stations had not reopened after the Lunar New Year Festival (Tet).

The ministry would instruct oil companies to persuade their agents to sell petrol, he said.

They could not stop selling just because of lower profits, he said, warning the Market Management Department would crack down on such violations, even cancelling licences if required./.