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Wednesday, July 17, 2024

Laos Sees Fourth Consecutive Fuel Price Hike in June Amid Inflation and LAK Depreciation

This Week

Laos experienced its fourth consecutive fuel price hike in June due to inflation, the depreciation of the Laotian Kip (LAK), and the war in Ukraine, affecting businesses and consumers alike, with no clear solution in sight.

The latest fuel price adjustment report has revealed a significant hike in fuel prices across Laos, varying slightly from province to province.

According to the report, Phongsaly province currently has the most expensive fuel prices, with premium petrol going as high as LAK 27,760, regular at LAK 21,660, and diesel at LAK 18,800.

Premium petrol price in Vientiane Capital is now at LAK 26,770, regular at LAK 21,660, and diesel at LAK 17,810. Between 13 March and 19 June, the average value for premium petrol in Laos has been around LAK 26,490.

The increase in fuel prices could be attributed to inflation, the depreciation of the LAK currency, and the ongoing war in Ukraine, which has disrupted global energy markets. The high fuel prices have caused a fuel shortage in the country due to low foreign currency reserves, with importers struggling to purchase enough fuel due to the decreasing value of the LAK.

Over the past two years, LAK has sharply depreciated against foreign currencies. To control the exchange rate, the Lao government closed foreign exchange shops except those in commercial banks and implemented other measures to stabilize the local currency. The surge in fuel prices is expected to continue affecting businesses and consumers, with no immediate solutions being implemented.

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