Vietnam plans to cancel state subsidies on all oil products, projected at nearly 1 billion US dollar (5,9 milliarder DKR) this year, by end-2008 as it moves to liberalise the fuel market in line with WTO commitments, according to the World Bank press review Friday.
The removal of subsidies will be done gradually, starting with diesel next year, Deputy Finance Minister Tran Van Ta noted. – From the end of 2008 all gasoline and diesel products will be traded under market mechanism, ending financial aid to oil product traders at the end of 2008 at the latest, Ta said.
The government usually uses funds from its crude oil exports to pay for fuel subsidies to boost economic growth. – Consumer demand for fuel is growing very rapidly, more and more people can afford motorcyles and cars, said an official at state oil firm Petrovietnam.
Officials said the subsidy removal was part of Vietnams free trade commitment as it prepares to join the World Trade Organisation later this year.
To gradually abolish subsidies, the ministries of Finance and Trade have hiked pumping prices of petroleum products twice this year, one in late April and another in early August, making light of a domino effect on prices of other commodities and services.
Kilde: www.worldbank.org
