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Laos raises retail fuel prices

The Laos government has approved a further increase in fuel retail prices, posing inflation challenges, Laos newspaper Vientiane Times reported. The government does not see tax reduction as a solution to stabilize fuel prices, said Santisouk Vilaychareun, director of the Domestic Trade Department under the Lao Ministry of Industry and Commerce, who noted that it already provided fuel subsidies of 300-400 kip (US$0.35-0.46) on every liter. The government pays about 520 million kip (US$61,162) in fuel subsidies every day, according to trade officials. Laos’ inflation rate rose to 10% in May from 8% in April and 6% in February, according to the Ministry of Planning and Investment. Economists say the government’s policy to curb lavish spending is good but officials must make it clear in which areas the public should cut their spending. According to the Lao Petroleum and Gas Group under the Lao National Chamber of Commerce and Industry, the country paid US$243 million for fuel imports in 2006 and US$452 million in 2007. (July 3, 2008)<BR>