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Post Info TOPIC: Lao government will add an additional 70 kip per litre to fuel prices, Good or not?


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Lao government will add an additional 70 kip per litre to fuel prices, Good or not?

Bridge tolls to be replaced with fuel surcharge

Authorities have stopped collecting bridge tolls in 29 locations nationwide following the issuing of a government notice last month.

The move is part of government efforts to facilitate the movement of vehicles and goods transport within the country.

To make up for revenues lost from the bridge tolls, the government will add an additional 70 kip per litre to fuel prices.

The additional 70 kip charge will automatically kick in when fuel prices next decrease.

A transport expert, who asked not to be named, revealed on Monday that the transport sector earned about 110 million kip per day from bridge tolls, and the revenue went directly to the road maintenance fund.

“The collection of bridge tolls has already ceased for 28 days, so we've lost many hundreds of millions of kip that should have gone to the road maintenance fund while we wait for the enforcement of the additional fuel charge,” the official said.

Critics say the new fuel surcharge would mean the government could collect large lump sums, but the system is unfair because it is not based on a user pays approach.

For example a poor rural farmer who just uses fuel to grow crops will have to pay more for his fuel but is highly unlikely to benefit from being able to cross bridges for free.

Collection of bridge tolls started several years ago, with cars, trucks and other heavy vehicles charged. Motorbikes and 3-wheeled vehicles were excluded from the toll, but these will now be subject to the new fuel surcharge.

The official said the Ministry of Commerce and Industry did not agree with charging bridge tolls as the practice slows traffic and the transport of goods.

Of the total 29 bridge toll collection points, three were in Champassak province. Provincial authorities have informed the media that they have stopped collecting the fees in all three locations.

Higher fuel prices are the main driver for rising transport costs and increasing inflation and food prices in Laos.

On Monday, the price of oil in the world market jumped to US$108 per barrel. In Laos, regular petrol now costs 10, 490 kip per litre in Vientiane, Khammuan province (10,540 kip), Xieng Khuang (10,760 kip), Bokeo (10,640 kip) and Champassak province (10,550 kip).

Diesel is sold for 9,370 kip per litre in Vientiane, Champassak province (9,430 kip), Xieng Khuang (9,670 kip) and Bokeo province (9,490 kip).

The Ministry of Commerce and Industry has stated it plans to keep the price of fuel in Laos below 11,000 kip per litre through a number of measures but is yet to announce details.

Options may include a fuel subsidy to reduce the cost of transport and lower goods prices.

Economists say the government will gain more than it loses if it subsidises fuel because bus operators will also introduce price hikes if the fuel price hits 11,000 kip a litre.

By Times Reporters

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