HANOI, Jan. 24 (Xinhuanet) -- Vietnam will consider eliminating price subsidies for petroleum products and coal, the newspaper Vietnam News on Tuesday quoted a finance official as saying.

    Subsidies for petroleum products annually cost some 15 percent of the country's gross domestic product to compensate for domestic fuel imports, Nguyen Tien Thoa, vice director of the Pricing Management Department under the Finance Ministry, said, noting that it also triggers cross-border smuggling of the products.

    "We currently have to import all the petroleum for domestic consumption, therefore, the retail price certainly should reflect the global price turbulence," he said.

    He said that this year, the Vietnamese government will reduce price subsidies for some key commodities and unreasonable trade protection this year. The country's pricing policy will be more flexible according to the world market's moves, but it has no intention of floating prices.

    The government still holds a tight rein over prices of some commodities, including rice, sugar and steel, for the sake of the economy, he added.

    If the prices of sugarcane and rice plunge, the government will subsidize their production cost. It will also intervene in steel prices if they soar to over 8 million Vietnamese dong (506 U.S.dollars) per ton, Thoa said.

    Vietnam, which earned nearly 7.4 billion dollars from exporting roughly 18.1 million tons of crude oil, spent some 5 billion dollars importing over 11.3 million tons of petroleum products in 2005, according to the country's General Statistics Office. Enditem