July 22, 2008: Vietnam raised domestic fuel prices by as much as 36 percent Monday to bring them closer to international costs, raising the possibility of even higher inflation, more interest rate increases and slower economic growth.
Retail gasoline prices in Vietnam were raised by 31 percent. A liter of the popular 92-octane gasoline grade now retails at 19,000 dong per liter, or $4.35 per gallon, up from 14,500 dong per liter previously, an official from the importer and retailer Petrolimex said.
The fuel price increase came less than two weeks after the government pledged to keep fuel prices unchanged until the end of the year and to cover losses by state-run importers despite mounting pressure from high global energy prices.
One economist predicted that inflation would rise beyond 30 percent in August and that there would be another increase of 2 percentage points in Vietnam’s base lending rate for banks, now at 14 percent.