Fuel wholesalers were told to keep fuel retail prices steady whilst urging them to dip into the nation's price stabilisation fund for petrol to offset losses.

The joint decision of the ministries of Finance and Industry and Trade took effect on December 5, coming after increases in global fuel prices during the last month.

According to a Ministry of Finance report, while the base price of RON 92 gasoline was currently 24,097 VND per litre, the retail price was only 23,630 VND.

Similarly, each litter of diesel oil 0.05S, kerosene and fuel oil is being sold for 22,310 VND, 22,020 VND and 18,510 VND, compared with their base prices of 22,936 VND, 22,988 VND and 18,496 VND, respectively.

In a bid to stabilise the economy and curb inflation, the ministries have decided to keep fuel prices and import tariffs constant.

Looking to offset losses from the price-freeze, wholesalers were encouraged to increase withdrawals from the price stabilisation fund from 200 VND to 300 VND per litre for gasoline, and from 300 VND to 500 VND per litre for diesel.

According to the latest report, the price stabilisation fund was sitting at 58.6 billion VND (2.7 million USD), after swelling to over 3 billion VND (141,911 USD).

Of the 12 petrol dealers who contributed to the fund, six reported positive fund balances.

Petrolimex's September balance stayed over 205 billion VND (9.7 million USD), while the Military Petroleum Corporation with over 180 billion VND (8.6 million USD).

As of September 30, PVOil reported a negative fund balance of more than 209 billion VND (9.88 million USD), while Petec Trading & Investment Corporation saw a loss of over 145 billion VND (6.86 million USD).

The Ministry of Finance (MoF) has rejected a proposal to reduce the gas tariff to zero percent in the hope of lowering retail prices.

Since December 1, consumers have paid an additional 80,000 VND (4 USD) per 12-kg gas canister.

To help lower the price, the Vietnam Gas Association sent a request to ministry to reduce the current 5 percent tariff to zero percent so retail prices will fall by 17,000 VND (80 cents) a canister.

While the Ministry of Industry and Trade also supported the association's request, the finance ministry did not think it was the correct time for a tariff adjustment.

Nguyen Anh Tuan, head of the ministry's price management, told the press that the Vietnamese price is based on world prices, which explains a recent rise in gas prices in Vietnam.

Tuan said that as local gas enterprises must pay another 267.5 USD for a tonne of gas, it was reasonable for them to raise the price by about 80,000 VND per 12 kg.

Regarding local rumours that poor management was causing gas prices to rise, Tuan said finance ministry inspectors have conducted regular inspections of gas prices and gas enterprises since 2010 and found no violations.

He concluded that after the ministry considered all factors, including market supply and demand, production and business conditions, as well as the consumer price index, officials chose to continue charging the current 5 percent tariff for gas, while closely monitoring gas prices in the local and world markets.

If gas prices continue to keep rising, ministry officials will suggest that the Government take suitable measures to stabilise the market, Tuan said.-VNA