Domestic fuel distributors and dealers have been struggling with increasing world petrol prices while a lid has been kept on retail prices in the domestic market.

During the first two months of this year, the volume of fuel imported declined by 31.7 percent while the world petrol price increased by 18.5 percent, the Ministry of Industry and Trade (MoIT) announced.

However, the decrease in imports is caused by declining consumption rather than a world price hike, the ministry said.

During an online meeting held by the MoIT on March 5, Vo Van Quyen, director of the Domestic Market Department under the ministry, said that in the past few days the basic petrol price was higher than the retail price on the domestic market.

Meanwhile, the domestic gasoline price now is much cheaper than that in other countries in the region, such as China , Laos and Cambodia . In Vietnam , the price of gasoline RON 92 now stands at 20,800 VND (nearly 1 USD) per litre in comparison with 26,288 VND and 25,830 VND per litre in China and Cambodia , respectively.

To solve difficulties for local petrol distributors, the MoIT, in co-operation with the Ministry of Finance, will organise a meeting later this month.

The Finance Ministry indicated it might consider an adjustment to the retail petrol price. However, in the long-term, petrol prices will be controlled under Government Decree 84 or the market mechanism.

Price adjustment and tax reduction are being applied in the short term only, Quyen said.

Government Decree 84 allows businesses to adjust petrol prices up to 7 percent when the world petrol prices fluctuate 7 percent in the past 30 consecutive days. When the global oil prices are unstable from 7-12 percent, enterprises are allowed to increase the price by 60 percent of the increase while the balance will be offset by import tax adjustment and the fuel stabilisation fund.

The two ministries will ask the Government to amend part of Decree 84 regarding higher commission rates for retail petrol dealers.

"The two ministries would address the issues soon with the aim of ensuring the domestic market runs under the market mechanism while curbing inflation and stabilising the macroeconomy," Quyen said.

In the past few days, several gas stations in Hue and Da Nang cities had temporarily shut down or reduced volumes for sale under the impact of surging world prices while the domestic price was required to stay unchanged, Quyen said.

The MoIT would supervise the market regularly to ensure sufficient supplies, he added.

Petrol dealers are required to hold a reserve of petrol equivalent to at least 30 days of supply.

Fuel dealers claim petrol prices should be raised by up to 1,000 VND per litre to prevent losses and to stabilise the domestic market./.