Vietnam hikes fuel prices by up to 24 percent Options

[KJK]

HANOI, Vietnam - Vietnam raised fuel prices by up to 24 percent, adding to soaring inflation and causing gridlock in the capital Hanoi as motorists scrambled to fill their tanks before the hike took effect.

The increase announced Thursday takes fuel prices to record levels and follows a decision earlier this week to raise electricity rates. Vietnam has been grappling with high inflation as food costs jump. The consumer price index rose 12.2 percent from a year earlier in January.

Traffic jams choked busy roads in Hanoi as car drivers and motorcyclists rushed to fill up before the 10 am deadline when the price increase took effect.
The gasoline price was increased 17.5 percent to 19,300 dong (92 cents) per liter and the diesel price hiked by 24 percent to 18,300 dong (87 cents) per liter. Crude oil has surged to nearly $99 a barrel on the New York Mercantile Exchange amid unrest in Libya that has disrupted oil supplies from the world's 15th largest exporter of crude.

Economists warn the fuel price hikes and a 15 percent increase in electricity prices that will take effect March 1 will lower living standards and undermine the government's attempts to curb double-digit inflation.

"How could we survive with all of these price increases while our incomes remain the same?" said Nguyen Thanh Hoa, 36, a state employee with two children to feed and an unemployed husband. She was among those rushing to fill her motorbike at a gas station in central Hanoi.

The fuel and electricity hikes combined with the recent devaluation of Vietnam's currency, the dong, would make it almost impossible for the government to curb inflation to under 7 percent, said economist Nguyen Minh Phong.

"We have to prepare to see the annual inflation rate to double the government's target," he said.

Phong said the living standards of ordinary Vietnamese would suffer.

"State employees like me and farmers would be hardest hit," said Nguyen Hoai Anh, 45. "I would have to travel less by motorbike to save money," he said.

[afz123456]

The increase in fuel prices is probably due to the recent turmoil in the Middle East and North Africa. Once the Political and Economic situation in that area stabilizes, fuel prices should decrease. It should not be long term and really is not that serious, at least in my point of view.

[FieryOFTheEast]

The increase in fuel prices is probably due to the recent turmoil in the Middle East and North Africa. Once the Political and Economic situation in that area stabilizes, fuel prices should decrease. It should not be long term and really is not that serious, at least in my point of view.

I'm pretty sure it will be a long time 'til the countries stabilize....

[davidlouis88]

What a bad news ! Our life will be more difficult day by day !!!

[Sogesu]

Energy prices are subsidized by gov for many years. Despite the increase of fuel price (to 19,000), it is still cheaper than in Kampuchea where it stays at 24,000 dong. Kampuchea is free market of oil that is close to world prices.
The price increase this time helps to curbs oil speculation in country and the smuggling across the borders with neighbors.

This post has been edited by Sogesu: Feb 25 2011, 07:50 AM