The Finance Ministry has issued a statement standing by its decision to keep prices of petroleum products unchanged, saying a price cut is only an option after import taxes are raised.
The statement, jointly issued with the Ministry of Industry and Trade, came amidst public disappointment over the news that a price reduction has been ruled out despite a sharp fall in crude oil prices.
According to the statement, prices of imported petroleum products in the first ten days of August fell by only 1.48-3.28 percent from July. That compared to a 10.46 percent drop in crude prices.
The ministries said local traders are making losses of between VND342 to VND530 per liter of petroleum they sell.
"If world prices increase, local prices will be adjusted up," the statement said. "If world prices fall, import taxes will be brought back at a reasonable level (on gasoline and mazut oil) and retail prices will be cut," it said.
The price of A92, the most popular gasoline product in the country, has stayed at VND21,300 per liter for since March 29.
Diesel and kerosene are currently subject to a 5 percent import tax. The import taxes for gasoline and mazut were cut to zero in January and February, respectively.
Consumers and experts alike have said domestic prices should be adjusted in line with the recent decline and it's not fair if the interests of businesses and the government are put first.
News website VnExpress on Saturday quoted Nguyen Tien Thoa, head of the price control department under the Ministry of Finance, as saying that government officials are also consumers and they understand that the public is facing daily difficulties due to rising prices.
However, keeping petrol prices stable is already a tough task, he said. When import prices are still high and taxes have been cut to very low levels, a price reduction is not a practical option.
Thoa said prices are monitored hourly under the supervision of the government and concerned agencies in a transparent manner. "If there's anything wrong, we will take the responsibility," he said.