Vietnam fuel traders offset losses with state fund

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The Finance Ministry on Wednesday allowed local fuel traders to offset their losses by extracting money from a state fund reserved for stabilizing fuel prices.

The fund is now granting fuel traders VND500 per liter of gasoline and VND400 for every liter of kerosene so that they can keep pump prices stable, local news website VnExpress reported.

The price stabilization fund was set up early last year by collecting a portion of retail sales revenues from traders.

The Finance Ministry said the VND1.5 trillion (US$78.6) fund was not very large but will be enough to help offset losses incurred at local fuel companies, which have been ordered to halt price hikes.

Since December 15 last year, the government has allowed fuel traders to raise pump prices automatically without seeking government consent if world prices rise by 7 percent or more.

Fuel traders asked the government to reduce import taxes so that they can keep prices stable. But the Finance Ministry said cutting taxes would be a last resort.

Vietnam's top oil product importer and distributor Petrolimex Monday said on Tuesday the firm was incurring a loss of VND934 on every liter of gasoline.

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