Help poor households cope with rising fuel prices: WB

"Temporary support including targeted transfer should be considered to help poor households weather the surging fuel prices," the lender says in its June country report.

To deal with the price shock that is mainly affecting fuels with passthrough costs of transportation, targeted temporary subsidies for main gasoline and fuel users (such as truckers) could be considered to alleviate hardship and blunt the inflationary pressure, it says.

Monday afternoon, Vietnam gasoline prices moved upward for the sixth consecutive time to scale a new peak of over VND32,000 ($1.39).

Skyrocketing gas prices are driving costs of other services and commodities up, causing a burden on households, the report notes.

It suggests that the Vietnamese government incentivizes investment to raise supply, and in alternative energy production and use, to reduce the economy’s dependence on imported fuels and promote greener growth.

Vietnam inflationary risk has inched up, but is still under the government’s goal of 4 percent.

Vietnam’s Consumer Price Index (CPI) rose 2.25 percent year-on-year in the first five months, compared to 1.29 percent in the first five months of last year.

The Ministry of Finance is also set to propose a further reduction in the environment tax on gasoline as fuel prices surge.