Deregulation may mean fluctuating pump prices: Official

Motorists must accept that under the market mechanism petrol and oil prices will fluctuate, said Nguyen Cam Tu, Deputy Minister of Industry and Trade.

The Deputy Minister added that he supported the move by Petrolimex to increase petrol and oil prices.

“Current retail prices of petrol and oil were based on the market mechanism under the State’s management, according to Government Decree 84/CP-ND on trading petrol and oil,” Tu said at an online discussion on chinhphu.vn yesterday.

“So, current retail prices of petrol and oil on the domestic market reflect developments in world prices and demand on the home market,” Tu said.

“The State will intervene to stabilise retail prices on the domestic market via tax policies and the price-stabilisation fund when petrol and oil prices increase by 12 per cent,” he said.

“Price increases by petrol and oil dealers twice this year were absolutely right and suitable to the rules of the market,” Tu said.

Nguyen Thanh Huong, Deputy Head of the Ministry of Finance’s Price Management Department, said the recent increases in the retail price of oil and petrol were due to the weakness of the Vietnamese dong against the US dollar and the increasing cost of some imports.

“The increases were requested and later approved by the ministries of Finance and Trade and Industry,” Huong said.

Regarding complaints by motorists that increases in petrol and oil prices at home were higher than global price rises, Tu said domestic dealers raised prices by 2.8 per cent and 3.6 per cent on January 14 and February 21, respectively, while world prices had gone up by 3 per cent and 3.9 per cent.

Viet Nam National Petroleum Corporation (Petrolimex) made public its calculation of petrol and oil retail prices on its website petrolimex.com.vn. The website carries details about import prices, taxes, fees, commission for agents and costs for ports, warehouses and tanks.

The Ministry of Industry and Trade also published price information on its website earlier this month.

“Petrolimex holds a 60 per cent share of the domestic market but in fact, it is under the control of the State and could not have a monopoly on trading petrol and oil,” Tu said.

The corporation accounts for 20 per cent of the total 10,000 petrol stations in the country. Tu said Petrolimex was duty bound to supply petrol and oil to remote areas, saving private enterprises huge amounts in transport costs.

VIETNAMNEWS

Tags: Vietnam petrol, Vietnam Petrol prices