The Ministry of Finance on Wednesday sent a document to local fuel wholesalers to ask them to maintain the current retail prices for petroleum products

According to calculations by the Ministry of Finance, the retail prices of petroleum products are lower than base price by VND52-849 per liter/kg.

However, to ensure the harmonization of local consumers, the state and fuel wholesalers the Ministry of Finance also required the businesses to sell gasoline and kerosene without profit, and cut the profit rate for diesel to VND250 per liter from VND300 per liter.

The move also aimed at stabilizing the price of fuel, the input of almost all industries, so that there will be no price level hike for Tet’s goods in the coming lunar New Year holiday, popularly known as Tet.

Regarding the petrol price stabilization fund , the ministry also requested the businesses to stop extracting money from the fund when selling diesel, and from VND890 per liter to VND520 per liter for kerosene.

On January 1, the ministry asked local petroleum wholesalers to maintain the current retail rates after receiving their proposals for a fresh price hike to help cover their losses.

But the ministry gave them the green light to begin to use the money deducted from their price stabilization funds after being required to stop doing so since December 18.

The approval on using deducted money, ranging from VND100-890 per liter sold to consumers, is said to help them made up their losses from selling fuel.

The local petroleum wholesalers said they were suffering losses amounting to VND237-1,219 per liter of fuel sold to the consumers. The rate for gasoline and kerosene were at VND586 and VND1,219 per liter sold, respectively.

In related news, many gas trading companies in Ho Chi Minh City said that domestic gas prices could decline on the first day of next month which coincides with the time of the Tet.

According to those companies, the world's gas prices has dropped $135 per ton compared to the contract price of $1,015 per ton in early January 2014 to $880 per ton, equivalent to a reduction of VND39,000 per per 12-kg gas container.

However, the representatives of those companies said domestic gas prices cannot be reduced just because they still have to pay the old price following the contracts they had already inked.

Reportedly, local gas prices unexpectedly rose to VND78,000 VND per 12-kg container in December 2013. By early January, when the world gas prices cooled down, the business also reduced the price by VND43,000 per 12-kg container.

The gas company said according to the current world price movement, local gas prices will continue to fall in the coming month and will likely return to the price level in December 2013, which was around VND400,000 per 12-kg container.