Vietnam fuel subsidy fund almost exhausted

TN News

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Photo by Ngoc Thang

The Ministry of Finance said it has used up US$138.3 million or 98 percent of the fuel price stabilization fund in the first half.

Revealing details for the first time, the ministry said the fund only had around VND55 billion ($2.6 million) left at the end of June, after inheriting $35.7 million from last year and accreting $105.2 million this year.

The fund, established in 2009, gets VND300 from retailers for every liter of fuel they sell, and is used to subsidize prices during periods of high global prices or when the government wants to keep prices low.

The ministry said 12 fuel retailers contribute to and use the fund but only five, including the biggest retailer Petrolimex, are still in the black while the others have overdrawn.

PVOil, a subsidiary of oil giant PetroVietnam, is most in the red at VND218 billion.

The ministry said it would hereafter be transparent about the fund, publishing reports every quarter.

Retail fuel prices were increased by 3.3 percent over two hikes in two weeks last month, sparking public criticism, but the ministry later said they were due to global hikes.

Retailers had cut rates by 3.7 percent in April, while a price hike in March saw it go up nearly 6.2 percent despite low global prices.

The Ministry said without the price stability fund, consumers would have suffered more and higher price hikes, especially in festive seasons when prices tend to surge.

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