Petrol reforms fuel market diversity
Petrol reforms fuel market diversity
Petrol monopolies topped the agenda in an online discussion between local policy makers and finance experts in Ha Noi yesterday afternoon.
The discussion also focused on ways to calculate petrol prices in a transparent manner in line with market mechanisms.
As Viet Nam's shift from a centrally-planned economy to a market economy under State supervision was a lengthy process that was still far from complete, Decree 84/2009/ ND-CP on trading petrol and oil products would be followed by many more decisions aiming to bring the petrol business in line with the market economy, said Nguyen Cam Tu, Deputy Minister of Industry and Trade.
Decree 84 allows fuel trading firms to increase retail prices when input cost prices change.
Regarding the issue of monopoly, deputy minister Tu said that while Petrolimex had once been the country's only fuel trading firm, there were now 13 major firms.
Still, Petrolimex currently holds up to 48 per cent of the domestic market share.
Since Decree 84 came into effect in October 2009, petrol prices were still mostly adjusted by the State.
Concerning information disclosure on petrol prices, the Finance Ministry always made official any information about price calculation and administration. The inspection results were also often made public.
Anyone who suspected that the petrol price was not determined in a transparent manner should check the information about the petrol price updated daily by the Ministry of Finance, Deputy Minister Tu said.
Nguyen Anh Tuan, deputy director of the Finance Ministry's Price Management Agency, also reminded the press to pay attention before releasing information about retail petrol prices. He noted that the current basic price was now based on the price of finished products, not on the crude oil price.
Bui Ngoc Bao, chairman of the Viet Nam National Petroleum Corporation (Petrolimex), said the Finance Ministry always conducted a press meeting before every petrol price adjustment and released information about petrol price adjustments in a transparent manner.
Policy-makers have kept a close watch on the ministry's tax management for a long time. In Viet Nam, when the global petrol price went up, the tax-levied petrol import was slashed so petrol could be sold domestically at a low price. Of course, local retail prices would not follow the global price trend, so the Government and the Ministry of Finance had to stabilise retail prices.
Import tariffs on petrol imports barely amounted to anything in the first six months of 2012 and the State had to use the Petroleum Price Stabilisation Fund to keep the retail price low. Vietnamese consumers are contributing VND300 per litre of petroleum products to the price stabilisation fund.
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