The new rate increases by VND500 per litre to VND12,700 for fuel oil, VND800 per litre to VND16,300 for A92 petrol, and VND1,000 per litre to VND15,200 for diesel oil and to VND14,300 for kerosene.

According to an official letter issued by the two ministries in 19 November 2009, the petrol and oil dealers would continue to contribute VND200 per litre for petrol, kerosene and fuel oil products and VND300 per litre for diesel oil to the price stabilisation fund.

This increase was accepted after the dealers complained of the loss of VND1,000 per litre that they suffered when the petrol and oil prices rose over the last 20 days to an average of USD82 per barrel of petrol and USD85 per barrel of diesel oil at the Singapore market, the major fuel supplier for Viet Nam, according to the two ministries.

So far this year, this is the ninth time retail petrol and oil prices have risen whilst they have dropped only once. Earlier, the Government issued Decree 84/2009/ND-CP on managing petrol and oil trading in the domestic market.

According to the decree, from December 15, the petrol and oil dealers could increase or decrease retail prices, according to market rules, three times a month instead of the one change currently permitted.

The traders could increase up to 7 percent of their retail prices of petrol and oil if the wholesale prices also surged by that amount.

In case wholesale prices increase 7-12 percent, traders could increase 7 percent plus 60 percent of the surplus between 7-12 percent. The balance would be compensated by the petrol price stabilisation fund.

If wholesale prices increase more than 12 percent, the State will have solutions to keep retail price stable, which will include permitting dealers to increase retail prices, suspend payments into the stabilisation fund and reduce import taxes.

If the wholesale price decreased by 7 percent or 7-12 percent, traders will have to reduce retail prices under the same rules as an increase. If the wholesale prices decline more than 12 percent, after increasing import tax and fees for the stabilisation fund, traders who still make extra profits will be required to reduce retail prices.