Petroleum distributors deaf to call for easing prices

Economists these days violently criticize petroleum distributors, saying that it is unfair for distributors to keep the retail prices high, while the world’s prices have been decreasing steadily for the last many days.

The world fuel market has cooled further these days with the crude oil price in New York down to $76 per barrel. In Singapore, the main petrol supplier for Vietnam, prices on all three key products (A92, diesel and kerosene) have also decreased.

A92 petrol in Singapore on May 24 dropped to over $76 per barrel, while oil products hovered around $80-81 per barrel. As such, just within the last 10 days, the petroleum products’ prices have decreased by 9-10 percent

“It is now the right time for petroleum distributors to slash retail prices,” asserted Vu DInh Anh, Deputy Head of Market and Price Research Institute, an arm of the Ministry of Finance. “If enterprises do not reduce prices voluntarily, government agencies can use supervisory tools to force them down.”

According to Anh, under Decree No. 84 on petroleum trade, if the world price increases by seven percent or more, enterprises can raise retail prices and when it decreases by seven percent or more, they should voluntarily lower prices.

“The world price has dropped by 9 percent. Consumers hope that the petrol price will decrease, but petroleum distributors remain deaf to the call for easing retail prices,” Anh added.

Meanwhile, petroleum distributors, still claiming losses, have refused to slash petrol prices.

Vietnam now has 11 petroleum importers and distributors. Petrolimex is now holding 60-70 percent of the market share, so companies consider the price set by Petrolimex to decide their retail prices.

According to Ngo Tri Long, an independent economist, under the current mechanism, no independent agency has come forward to examine the operation of enterprises. This has created a loophole in the laws and businesses always claim a loss to counter calls for lowered retail prices.

“Companies try to prove that they incurred losses by comparing the cost price and the current retail price. However, the method has not been verified,” Long commented.

Economic analysts note that petrol prices increase just several days after the world’s price increases, but they will not drop until several days after the world’s price decreases.

“It is unfair for consumers,” Long argued. “The import prices have been decreasing, and there is no reason for petroleum distributors to refuse to slash retail prices.”

According to Long, every day, Petrolimex sells 8 million litres of petrol to the market. If it makes just 100 dong per litre, their profit would be very fat.

To date, no petroleum distributor has issued a price decrease. Meanwhile, the Ministries of Finance and Industry and Trade are keeping a close watch over the world price.

“In case enterprises do not decrease petrol prices voluntarily, we will request that they ease retail prices,” observed an official from the Ministry of Finance.

VnExpress

Tags: Vietnam petrol, Vietnam Petrol prices, Vietnam Petroleum