The last few days continued to see more filling stations across the country cut or stop sales, with some even demanding to shut down, while three fuel wholesalers have called on a price hike to escape losses.

The soaring fuel prices on the global market have exerted heavy pressure on domestic prices, with many fuel stations claiming that the more fuel they sell, the larger the losses they incur.

According to Petrolimex, the country’s largest fuel wholesaler, A92 gasoline price traded earlier this month amounted to as high as US$134.33 a barrel, while oil prices also soared to $136 a barrel.

Under the calculation proposed by the Ministry of Finance, importing petrol price in the latest transaction is around VND23,500 a liter, while the current retail price is only VND20,800 a liter, causing huge losses for fuel businesses, Petrolimex said.

This has resulted in an increasing number of filling stations halting their sales.

In Hanoi, for instance, many filling stations in Thanh Xuan District have cut their sales, or even stayed closed since Monday. Meanwhile in Da Nang City, fuel sellers on streets far away from the city downtown such as Nui Thanh, Ngo Quyen, Truong Chinh, or Ton Duc Thang, have put up banners that read “out of fuel,” “blackout,” or “waiting for refill,” to discourage customers.

Several filling stations in the central province of Thua Thien – Hue have even sought permission from the provincial Department of Industry and Trade to temporarily shut down operations due to losses, according to department director Vo Phi Hung.

Wholesalers propose price hike, experts suggest tax cuts

Nguyen Tien Thoa, head of the Price Management Agency under the Ministry of Finance, said the institution has so far received price hike proposals from three fuel wholesalers.

They include PV Oil, Saigon Petro Co Ltd, and Petrolimex.

However, Thoa refused to elaborate on how much the wholesalers wanted prices to be hiked.

Meanwhile, talking with Tuoi Tre, many experts have suggested that the government make use of its measurements over fees and taxes to tame the rising fuel prices, and even use the state budget to make up for the businesses’ losses.

Should domestic fuel prices be increased during this period of economic difficulty, inflation will definitely skyrocket, experts warned.

Doctor Ngo Tri Long, former deputy head of the Ministry of Finance's Market and Price Research Institute, suggested slashing import tariffs for oil to zero from the current 3 percent, as was done with gasoline.

Moreover, the fee included in the prime cost calculation for petrol should also be halved to VND500 a liter, he added.

Dr. Long also said that if the government considers curbing inflation the top priority, it has to use part of the state budget to cover for the businesses’ losses.

For instance, he said, the government can earmark part of the revenues from the increasing crude oil export prices to recoup for the rising import prices of other oil products.

However, Deputy Minister of Finance Vu Thi Mai said such a solution is infeasible.

“Under the Laws on State Budget, it is impossible for money from the state budget to be used for price stabilization,” she explained, adding that the proposal to use the state budget for that purpose, if any, is also required to have approval from the National Assembly.

“In other words, this cannot be considered a flexible solution for the issue,” she concluded.

Tuoitre