Chance to cut fuel prices missed over unchanged law

Dec 18th at 13:09

18-12-2012 13:09:14+07:00

Global fuel prices have recently slumped but the retail prices in Vietnam remain unchanged, as always.

Local retail fuel prices have been managed in accordance with Decree No. 84 since 2009, but analysts say the regulations are now obsolete with the world’s current price development.

The import price of A92 gasoline from Singapore, the country’s main fuel supply, has been on a downward trend over the last two weeks, insiders said.

Most of the trading sessions within the last 10 days closed at US$111 – 113 a barrel, and the real cost price of local fuel wholesalers was some VND22,250 a liter accordingly, including taxes and fees.

With the current retail price for A92 gasoline standing at VND23,150 a liter, wholesalers are enjoying a VND900-per-liter profit, and thus are totally capable of cutting prices to help customers.

However, Decree No. 84 stipulates that the cost price be calculated based on the average import price within 30 days of the day the import session is closed, thus wholesalers say they only break even at the moment.

Wholesalers are thus enjoying profits from the petroleum products, and have increased commissions for their dealers.

Some dealers said they are receiving huge commissions of up to VND850 a liter from the wholesalers.

The fuel businesses meanwhile said that the A92 gasoline retail price can now be slashed by VND500 a liter without affecting the rights and interests of wholesalers and dealers.

Unfulfilled promise

Decree No. 4 has been in effect for as long as three years, and even the Ministries of Finance and Industry and Trade admitted in a meeting in mid-2011 that the law is outdated.

The ministries thus promised an amendment on the decree. But it is now a year and a half since then, and the promise remains unfulfilled.

Meanwhile, a chief official of the Domestic Market Agency under the Ministry of Industry and Trade told Tuoi Tre that the ministry is collecting feedback from relevant agencies for its amendment before submitting it to the government.

“The ministry is still considering the possible solutions,” the official said, asking not to be named.

“But it is expected to report to the Government about the Decree No. 84 amendment within this month,” he asserted.