Petrol prices fall after deregulation

The Viet Nam National Petroleum Corporation (Petrolimex) yesterday, December 15, became the country’s first petroleum distributor to decrease pump prices after the Government authorised firms to set their own rates.

A driver fuels up at a Petrolimex petrol station in Ha Noi. (Photo: VNN)

As of 3.30pm yesterday, the corporation offered A92 petrol at VND15,950 per litre, VND350 lower than its earlier price. A95 petrol was also selling for VND16,450 per litre or VND350 less.

However, the diesel price went up VND300 to VND14,600 per litre.

Vuong Thai Dung, Petrolimex deputy general director, said A92 petrol was being offered in Singapore for US$74.91 per barrel, while kerosene was selling for around $79.11 per barrel and diesel for about $77.85 per barrel.

After deducting costs for freight, taxes and commission, the corporation was earning VND350 on each litre of petrol sold, but was losing money on diesel, Dung said. Petrolimex holds a 60 per cent market share.

At 9pm yesterday, Military Petroleum Company and PetroVietnam announced that they would be reducing the petrol price by VND300 and VND400 per litre, respectively.

Under Decree 84 released yesterday to replace Decree 55/2007/ND-CP dated April 6, 2007, oil and petrol distributors have the right to set their own domestic retail prices when global prices fluctuate.

When price changes result in losses of up to 7 per cent, companies are allowed to raise retail prices by an equivalent amount. Only three price hikes are permitted in any one month, and they must be at least 10 days apart. When losses are in the range of 7 per cent to 12 per cent, enterprises can raise the retail price by at least 7 per cent. If their costs increase suddenly by over 12 per cent, the State will intervene to stabilise the market with taxes or the price-stabilising fund.

Nguyen Tien Thoa, director of the Ministry of Finance’s Price Management Department, said that with the new regulation, enterprises would be better able to balance supply and demand and reduce losses.

Vo Van Quyen, deputy director of the Ministry of Industry and Trade’s Domestic Market Department, said that when firms adjust prices, they must take into account their responsibilities to society and the State. When they wish to adjust prices, they must submit a request to a State-management agency.

Not only management agencies but also the public can check to make sure prices changes reflect world fluctuations, he said.

Previously, the Ministry of Finance was the only agency that could adjust petrol and oil retail prices.

VietNamNet/Viet Nam News

Tags: Vietnam Petrol prices