Ministry of Industry and Trade proposes to reduce the amplitude and level of gasoline price increase
The Ministry of Industry and Trade has just issued document 120/BC-BCT reporting to the Prime Minister to propose amendments to Decree 84/2009/ND-CP dated October 15, 2009 to flexibly operate and strengthen management of the petroleum trading system.
According to the Ministry of Industry and Trade, Decree 84 has gradually created a competitive petroleum market. There are currently 13 key traders importing petroleum from various economic sectors (9 traders are state-owned enterprises, 4 traders are non-state-owned enterprises). In addition, there are about 300 general agents, about 4,500 agents and about 10,000 petroleum stores, most of which are non-state-owned economic sectors.
By the end of October 2012, Petrolimex's market share was about 50%, that of Vietnam Oil Corporation - PV Oil was about 16.6%; that of Thanh Le Import-Export Trading Corporation was about 5.3%... The supply of gasoline in the past time has basically met domestic consumption. Notably, the State no longer has to subsidize or compensate for gasoline losses. Domestic retail gasoline prices basically reflect and closely follow the trend of fluctuating world gasoline prices, significantly reducing gasoline smuggling and foreign currency bleeding...
Although appreciating the progress of Decree 84, the Ministry of Industry and Trade also pointed out and proposed a number of regulations that need to be studied for supplementation and amendment. For example, the regulations on conditions for petroleum traders regarding wharves, warehouses, distribution systems, means of transport... do not allow for a proper assessment of the real capacity of traders. The regulations on conditions are still low (7,000-ton wharves, 15,000 m3 receiving warehouse...) leading to the failure to select key traders with strong enough potential to ensure the distribution system when there are fluctuations.
In addition, the regulation allowing each other to rent wharves, warehouses, means of transport, etc. leads to discouragement and inability to select traders with real capacity to invest in infrastructure and participate in the market; on the contrary, it creates dependence of new traders on old key traders, reduces future competitiveness as well as creates loopholes for traders to take advantage of the mechanism and do business opportunistically.
Notably, regarding the formula for calculating the base price, Decree 84 determines the average price for management, considers the difference between the base price and the current selling price, and then handles the specific price and applies price stabilization measures. The base price is not the price of a trader, not the price of a day, not the price of a shipment. This is the price that reflects the fluctuating trend and is common to all key traders.
Therefore, according to the Ministry of Industry and Trade, this will have a positive impact on the business activities of enterprises; encourage enterprises to choose suppliers, good import price opportunities, organize a reasonable business network to have the actual cost price lower than the base price, creating a profit higher than the prescribed profit level (300 VND/liter, kg). On the contrary, it will create pressure on enterprises that import at high prices, organize an unreasonable business network... leading to a cost price higher than the base price, little profit, or even no profit, thus forcing these enterprises to actively reorganize their business activities to be effective...
Some elements in the current base price have changed, such as "gasoline fee" has now been converted into "environmental protection tax", value added tax was previously not calculated on gasoline fee but is now calculated on environmental protection tax... Thus, there is an amendment and a change in the order of some elements of the base price (some taxes, fees...) compared to the time of drafting the decree.
At the same time, in the calculation of base price, there are 2 exchange rates for calculating base price when accounting for gasoline: interbank exchange rate to calculate import tax, special consumption tax and commercial bank selling rate when calculating base CIF price.
On the other hand, regarding the frequency of price adjustments, the Ministry of Industry and Trade believes that the regulation of the time between two consecutive price adjustments being at least 10 calendar days in case of price increases and at most 10 days in case of price decreases is not flexible in the context of complicated world price developments as well as the requirement to stabilize the market and stabilize the macro economy every year...
In addition, the Ministry of Industry and Trade pointed out that currently, the standard profit and standard business costs stipulated by the Ministry of Finance in Circular 234/2009/TT-BTC dated December 9, 2009 (stipulating business costs for 1 liter of gasoline, diesel, kerosene is 600 VND; 1 kg of mazut is 400 VND) established from 2009 to now have become outdated due to many fluctuations in construction costs (salaries, depreciation, transportation costs, financial costs...), therefore, in addition to stipulating adjustment principles, it is also necessary to promptly adjust the above levels to establish a basic price level close to reality...
Furthermore, regarding the range of adjustment to increase or decrease the price of gasoline and oil, the Ministry of Industry and Trade proposed that it is necessary to conduct research to regulate the price adjustment range in accordance with fluctuations in world gasoline and oil prices: instead of following the current 3 levels of 7%, 12% and over 12% (Clause 2, Clause 3, Article 27), it should be replaced by smaller levels, such as 3%, 5% and 7%; or regulate the level of adjustment of domestic gasoline prices when the difference between the base price and the current price is a specific number (for example, within the range of up to 500 VND/liter, kg, traders will adjust the selling price; above 500 to 1,000 VND/liter, kg, traders will adjust the price themselves in combination with using the Gasoline Price Stabilization Fund; above 1,000 VND/liter, kg, traders must have the opinion of the Ministry of Finance - Industry and Trade before they are allowed to adjust the price; this range may change according to the Prime Minister's Decision, suitable for each period).
According to Hanoi Moi - TH
