Vietnam cuts fuel subsidies after 15-pct inflation

HANOI, Feb 28, 2008 (AFP) – Vietnamese consumer prices rose more than 15 percent year-on-year in February, according to official figures released Thursday, heightening inflation concerns especially for the poor. The General Statistics Office (GSO) said the consumer price index (CPI) for February rose 15.67 percent compared to the same period last year.

The figure was the highest registered year-on-year increase for February in the last decade said a GSO economist who declined to be named.

The GSO said February food prices rose 25.23 percent year-on-year, with rice and other grains increasing by 17.71 percent.

Communist Vietnam wants to restrict consumer price hikes to no higher than planned economic growth of between 8.5 to 9.0 percent for the year.

But on Monday Hanoi hiked fuel prices at the pump by 11 percent to cope with record world oil prices of more than 100 US dollars a barrel.

A finance ministry official, who declined to be named, said the rise was designed to combat oil smuggling between Vietnam and neighbouring countries. However, it also raised fears of worsening inflation.