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What future gas price mechanism for Vietnam

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Gas market expansion proceeded in Vietnam through 2010 despite managed gas pricing, as most indigenous gas reserves could be produced at a relatively low cost. But, as new sources of supply are higher cost, Vietnam must transition to a new pricing mechanism or risk market stagnation and supply declines in the longer term. Vietnam is not alone in this situation, and can draw from lessons learned from other markets in Asia to determine the appropriate pricing mechanism for the market context and government policy objectives. Successful models include gradual introduction of market orientation and price increases.

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