Proposing businesses to decide the retail price of petrol and oil by themselves
The Ministry of Industry and Trade has just submitted a draft Decree amending and supplementing a number of articles of Decree 95/2021 and Decree 83/2013 on petroleum business for comments.
Accordingly, this Ministry chooses the option of petrol and oil trading enterprises based on their actual expenses to determine and announce the retail prices of their businesses, declare prices when changing prices and report to them report to the Ministry of Industry and Trade and the Ministry of Finance for supervision.
The Ministry of Industry and Trade proposed the time to adjust gasoline prices down to 7 days. (Illustration image – Photo: Investment Newspaper)
Enterprises can self-determine gasoline prices
According to the Ministry of Industry and Trade, over the past time, the petroleum market has had many fluctuations, the supply of petrol has been unstable at times. One of the reasons is that business expenses have not been calculated properly and sufficiently in the price structure of petrol and oil base operated by the state, leading to loss of oil and gas business enterprises, no motivation to maintain business activities.
To overcome the above situation, the Ministry of Industry and Trade proposed the Ministry of Finance to coordinate in reviewing, amending and supplementing regulations on the base price formula of petroleum products according to the following options:
Option 1: Continuing to administer petrol and oil prices according to current regulations and amending the current base price formula in the direction of reviewing and adding a number of actual costs incurred by enterprises, but not yet included in the plan current base price, such as reviewing domestic premium regulations.
At the same time, review regulations on methods of determining costs, frequency of determining costs, ensuring correct, complete and timely calculation of costs in the base price announced by the State.
Option 2: Modifying the price formula and method of announcing the base price of petroleum products in the direction that the State only publishes the price constituent elements including world prices, taxes collected into the State budget, profits the standard profit, the level of provision, only using the Price Stabilization Fund to guide the calculation and decide the specific retail price of petrol and oil of the leading petroleum trading enterprises.
Enterprises base on their actual costs, including business expenses, transportation costs, premium… to determine and announce the retail price of their businesses, declare prices when price changes and report to the Ministry of Industry and Trade and the Ministry of Finance for supervision.
Specifying this issue, the Ministry of Industry and Trade chose option 2, whereby the state only announced the directional price (including the factors of world price, tax, profit norm, the level of deduction for setting up the Price Stabilization Fund), other costs are determined by the enterprises themselves and are responsible before the auditing agencies.
The reason for choosing this option, the Ministry of Industry and Trade believes that it will help bring gasoline prices to the market gradually, reducing the intervention of the State. At the same time, ensure to fully reflect the actual costs incurred by businesses in the base price of petrol and oil, harmonize interests between stakeholders, and help maintain the supply of petroleum to the market.
Shorten the price management time to 7 days
In the draft, the Ministry of Industry and Trade also proposed two options for changing price management.
Option 1: Keep the current price management time, once every 10 days on the 1st, 11th and 21st of every month. When the market has great fluctuations, the Prime Minister directs the inter-Ministry of Industry, Trade and Finance to manage petrol prices in accordance with developments in each period.
Option 2: Shorten the operating time, announce gasoline prices down to 7 days, specified on a specific day of the week.
The Ministry of Industry and Trade chooses the option to shorten the operating time for petrol and oil prices to 7 days, on every Thursday, excluding public holidays, except for the case that coincides with the 1st, 2nd and 3rd January of the lunar calendar.
According to this ministry, the reason is to ensure gasoline prices more closely follow developments in the world market. The operation even on public holidays is to avoid large fluctuations in prices, affecting the interests of consumers or businesses dealing in this item.
However, the Ministry of Industry and Trade said that this shortening to 7 days also has the disadvantage that the time to import gasoline from abroad to Vietnam (from ordering to arrival at the port) is about 10-15 days, so when the market is unstable in an unfavorable direction, businesses will have an opinion. Because this can affect the business plan of enterprises, it is difficult to predict the domestic price when importing gasoline, especially when the price cycle goes down.