Vietnam finance minister backs daily fuel price adjustment
Vietnam finance minister backs daily fuel price adjustment
Vietnam’s Minister of Finance Dinh Tien Dung has showed his support for the idea that fuel prices should be adjusted every day in order to render them to be more driven by market forces.
The Southeast Asian country currently alters fuel prices every 15 days, and the finance minister wants them to be regulated on a daily basis, he told reporters in Hanoi on Thursday.
The daily price adjustment will enable fuel prices in Vietnam to rise and fall more proportionally to global market developments, according to the minister.
“So if global price is up, we will increase the domestic rate, and vice versa,” he said. “But what’s more important is the price management would be more transparent.”
The Ministry of Finance and its industry and trade counterpart ‘manage’ fuel prices in Vietnam, meaning they together change them whenever they think it is necessary, considering global quotes.
Deputy Minister of Industry and Trade Do Thang Hai has also said in a recent meeting that fuel prices should be altered on a daily basis to ensure it is driven by market forces.
Under the current management, Vietnamese usually pay high fuel prices even when they have already plummeted in the global market.
Moreover, it is also common for fuel prices to be hiked sharply in Vietnam, whereas any price cuts are usually modest.
Minister Dung however said both ministries have improved their regulation of the fuel market, making it develop in line with the global trend.
“I have requested fuel wholesalers that they should wait 15 days to increase prices, but when it is possible to slash the rates, they should do so immediately,” he said.
But the minister admitted that a “more flexible management mechanism” should be in place, apparently referring to the proposed daily price adjustment.
The Vietnamese fuel price market is currently stipulated by a decree, so any change should be made in an official proposal to seek government approval.
In 2015, Vietnam adjusted fuel prices 18 times, including 12 price cuts.
The first price reduction was on January 5, 2015 and the last one, December 18.
A92 petrol, the country’s most popular gasoline, ended 2015 at VND16,400 (US$0.73) a liter, down 6.65 percent from the beginning of that year and the lowest since 2010.
The first fuel price adjustment this year fell on January 4, when petrol rates went down by VND370 to VND16,030 a liter.
