Source: Vientiane Times
The spiralling cost of fuel on the global market is having an effect in Laos, where some oil refineries are hoarding fuel with the intention of making a profit, a senior government official has said.
At the same time, Lao businesses are struggling to import sufficient fuel to meet the country’s needs, Minister of Industry and Commerce, Dr Khampheng Saysompheng, told a press briefing on Sunday.
Fuel importers are also suffering from the rise in cost because, while the price of imported fuel is rising, the increased cost is not reflected in sale prices in Laos. This means businesses are losing money.
“Some petrol stations have less fuel for sale, because less fuel is being imported. Some petrol stations close early when their stock of fuel runs out,” Dr Khampheng said.
If the imported price of oil is higher than the retail price in Laos, businesses may not be able to supply all the oil needed in the next one or two weeks.
A meeting was held to discuss the issue, when it was decided that if the price of oil continues to remain at a high level, sufficient oil would be bought to last for five to seven days instead of 15 days as at present.
The rise in price of imported fuel means that retail prices in Laos will inevitably continue to rise.
The price of oil is factored into the cost of production, meaning that product prices will also rise.
The government will try to lower costs by reducing the fees paid to the road maintenance fund, as well as lowering taxes and other fees paid by businesses, in order to keep prices from spiralling out of control.
Meanwhile, authorities are monitoring petrol stations, to prevent them hoarding fuel.
Laos imports all of its fuel, so the price of oil and petrol on sale in Laos is determined by the global market price.
This year, frequent fuel price hikes have occurred because of geopolitical situations as well as the rising demand for fuel. However, the Organisation of Petroleum Export Countries (OPEC) is not increasing production capacity, which could drive prices even higher. The price of oil is currently teetering on the brink of US$150-180 a barrel, marking a new 10-year record.
This is reflected in the increasing retail price in Laos, with premium grade petrol now costing 18,640 – 19,200kip per litre, regular grade selling for 16,380 -17,020 kip, and diesel costing 14,500 – 15,150 kip per litre.