Vietnam to allow free market pricing of power, fuel: finance ministry

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The Ministry of Finance said prices of electricity, coal, fuel products and public services, which are heavily subsidized by the government, will be determined by the market no later than 2013.

Prices of these essentials will gradually be "given back to the market," the ministry said Saturday, adding that subsidies will be removed at the right time.

However, the ministry said electricity prices will only be raised to a reasonable level in 2012 as the government aims to keep inflation under 10 percent.

Vietnam raised electricity prices by 5 percent last Tuesday. The average power tariff is set at VND1,304 per kilowatt hour.

Fuel prices will also be reviewed, the ministry said, noting that importers are now enjoying very low import duties.

Finance Minister Vuong Dinh Hue said apart from the law on prices expected to be passed by the National Assemly next year, his ministry will complete pricing policies and mechanisms.

The immediate task, however, is to keep prices stable for the upcoming Lunar New Year holidays, he said.

The Finance Ministry plans to bring the budget deficit to 4.8 percent of gross domestic product in 2012, down from 4.9 percent this year, and keep national debts at no higher than 50 percent of GDP.

Hue said his ministry aims to increase state budget revenues by between 5 and 8 percent next year.

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