Pause in petrol price hikes urged

The Ministry of Finance has called on petrol suppliers to delay the next petrol retail price hike until the end of June, to help rein in inflation.

If the time extension had a negative impact on the enterprise they were required to report to the Ministry of Finance and the Ministry of Industry and Trade so it could take other measures to stabilise prices.

When deciding to increase retail petrol prices, enterprises had to give the public plenty of warning and explain the reasons for the increase to petrol price supervisors.

Since October, petrol prices had increased five times. The latest increases were VND590 on February 21 and VND450 on January 14.

Some commentators had said it was unreasonable to raise the petrol prices so many times in a short period and it raised concerns over giving the power to enterprises to change prices.

Decree No 84, which took effect on December 12 last year, regulates that enterprises can increase fuel retail prices with consideration to prices on world markets.

If the import price fluctuates, enterprises can raise the retail prices on up to three occasions in a month.

Previously, the Ministry of Finance was the only agency which had the right to adjust retail oil and petrol prices.

Vu Dinh Anh, deputy head of the ministry’s Price and Market Research Institute, said oil and petrol played a critical role in macro-economic balance, thus the State must control it.

To float the petrol price would require at least three enterprises with the market share equivalent to the Viet Nam National Petroleum Corporation (Petrolimex)’s. Then the competition would be healthy and benefit consumers.

To fix the problem, Anh suggested that the Government set ceiling prices. This would force enterprises to compete by decreasing prices.

In the monthly cabinet meeting, the National Finance Supervision Committee also urged the Government to revise petrol management, saying the domestic petrol price was 5 per cent higher than the world level.

However, Petrolimex general director Bui Ngoc Bao said the time between the recent adjustments to prices was reasonable considering the decree allowed a minimum of 10 days between adjustments.

He said the decree had created a breakthrough in oil and petrol management and formed a legal framework for enterprises to take responsibilities for their own operations.

A Ministry of Industry and Trade spokesperson said that to ensure healthy competitiveness, the decree’s scope would probably be expanded to allow all types of companies to change petrol retail prices, rather than only State enterprises.

This month, the ministry also decided to appoint teams to supervise tax and price regulations in enterprises in six sectors: cement, animal feed, construction steel, liquified gas, fertiliser and sugar.

All violations would be seriously punished, the ministry said.

VietNamNet/Viet Nam News

Tags: Vietnam petrol, Vietnam Petrol prices, Vietnam Petroleum