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Gas prices soar despite tax cut (02/11)
06/08/2010 - 72 Lượt xem
On November 1, 2007, gas trading firms all announced the retail price increase of another VND18-20,000/tank.
Gas prices have never witnessed so many increases as in the last two months. Since the beginning of September, the market saw 5-6 sharp price increases.
The increases have been explained as the result of world market increases. According to Le Phuc Dai, Director General of Vinagas, the global price soared to $742.5/tonne for November, an increase of $90/tonne over the previous level. After tax and transportation fees, gas importers will have to pay $980/tonne.
The Dinh Co Gas Plant has resumed production after their maintenance period and is selling gas at $930/tonne, $50 lower than imports.
However, as Vietnam still is heavily reliant on gas imports (60% of domestic demand is fed by imports), domestic market prices are still heavily influenced by world prices.
The sharp increases have made it difficult on Vietnamese households. Nguyen Thanh Van, who lives in HCM City said that her family consumes one tank of gas every month. She now has to pay VND50,000 more a month for fuel. Meanwhile, the prices of food and other services also keep increasing, forcing her to tighten her belt.
When asked why gas firms have not lowered the retail price after the Ministry of Finance announced the tax cut, the firms said it has not been ratified yet.
The problem lies in the fact that though the decision on cutting the gas tax was released in early October, it will be valid 15 days after the decision is published in the official gazette. It appeared on October 25 and will, therefore, be valid on November 8. As a result, prices still reflect the 5% rate.
Gas traders have warned people they should not expect sharp price decreases once the tax cut decision comes into effect since it may not offset high import prices.
The tax was cut by 3%, which comes out to a $17/tonne decrease, too small when compared to the price increase of $90/tonne.
Source: Lao dong.
