Govt spends over 400 billion kip on fuel price subsidy
Govt spends over 400 billion kip on fuel price subsidy
The government has spent more than 400 billion kip last year to subsidise fuel prices as part of efforts to keep inflation low, according to a senior official from the Ministry of Industry and Commerce.
Director General of the Domestic Trade Department, Mr Leuam Yongvongsitthi recently said that fuel is one of the strategic goods which the government has to control in order to maintain economic stability.
“When it comes to the price ceiling on imported fuel, we [the department] have the right to raise or decrease the price in line with the movement of the fuel price on world markets,” he said.
Earlier this month, the price of diesel was adjusted from 9,000 kip per litre to 8,000 kip per litre to ensure the price is rising.
Mr Leuam stressed that if the price of diesel was not controlled by the government diesel would be sold at 15,000 kip or 20,000 kip per litre on the market.
“If there was no subsidiary on the fuel price many customers would be in a difficult situation as they would be spending a lot of money on fuel,” he said.
Asked how the government subsidises the fuel price, Mr Leuam explained that the government charges a lower import tariff than what it normally would in order to maintain lower prices.
He pointed out that the negative impacts of rising fuel prices, which in turn have a direct influence on the prices of other goods, especially the production of refined goods which require transport or the use of fuel.
As the country is heavily reliant on imported fuel the government has to closely monitor the movement of fuel prices on global markets and carefully subsidise the fuel price in local markets to maintain economic stability.
vientiane times
