Fueling the pricing debate

Deputy minister of Industry and Trade Nguyen Cam Tu recently told VIR setting petroleum prices based on market rules might not immediately bring order to the petroleum market.

Is the recent price hike a solution to address current petroleum market vulnerabilities?

In current circumstances, price surges are considered the best ‘cure’.

However it might not be this is the single solution to bring the [petroleum] market in order.

To ensure petroleum market stability, management agencies are using a slew of measures, but it also requires joint efforts from both distributors and petroleum firms.

State authorities are considering some other remedies which will be unveiled in an appropriate time. Expanding production at Dung Quat oil refinery is also one viable option.

Recent petroleum price hikes were inevitable, which was counted on oil price situation in the world marketplace, domestic supplies and macroeconomic stabilisation targets.

Your comments about the Ministry of Industry and Trade’s (MoIT) confirmation about sufficient petroleum supplies amid lots of filling stations closures due to a lack of supply?

I am sure the total petroleum supplies are sufficient.

In fact, petroleum we had thus far imported was up 33 per cent compared to corresponding period in 2010. However, admittedly the products were not equally distributed among distributors leading to a mess in the petroleum market.

Petrolimex currently ensures 53 per cent of petroleum supply domestically. Besides, Dung Quat petroleum products may fill up 30 per cent of market demands. To my mind, recent vulnerabilities in the petroleum market partly came from psychological factors.

What steps has the MoIT taken to address the petroleum market mess?

The MoIT sent official dispatches to petroleum distributors requiring them to streamline operations and ensure stable and sufficient supply to the domestic petroleum market. Filling stations are also given higher commissions to ensure them running at profit.

Lately, the MoIT engaged in extensive market surveys of 477 filling stations and found 15 units had committed violations who then incurred appropriate penalties. I can say for sure that local petroleum trading system will be in balance within the next days. – VIR

Tags: Vietnam petrol, Vietnam Petrol prices