World crude oil continues to decrease, what will happen to domestic gasoline prices?

The next gasoline price calculation cycle will be on November 18. Currently, world oil prices continue to fall sharply. Consumers are waiting for a new price reduction, while key businesses say that is unlikely.

Oil prices fell across major markets around the world. The first day of the week saw the price of light sweet crude oil in the US market drop by $1.01 to $40.74/barrel. In the UK market, Brent oil price dropped by 46 cents to $43.60/barrel.

Looking more broadly, over the past month, oil prices have fallen by more than 10%. Foreign experts predict that oil prices will continue to fall below the $40/barrel mark and there will be new lows.

The main reason is information about the world's excess oil supply. The International Energy Agency (IEA) estimates that every day, the world is adding between 0.7 and 2.5 million barrels of oil surplus. Since June 2014, oil prices have fallen by two-thirds.

With current factors, many energy market experts predict that there is little chance for oil prices to recover in the near future.

World crude oil prices are nearing bottom at 40 USD/barrel, will domestic gasoline prices decrease as well?

However, in response to that decline, domestic petroleum businesses said that the current developments in world crude oil prices do not significantly affect the prices of finished petroleum products that businesses import.

A representative of Saigon Petro Company Limited said that world oil prices are currently falling quite deeply, but at the beginning of the cycle of calculating the basic price of gasoline and oil (according to the cycle of calculating the price is 15 days from November 3), the company's price is higher than the selling price.

According to Saigon Petro representative, consumers mainly see the price of crude oil fluctuate down and demand to reduce the domestic gasoline price accordingly. However, in reality, many times the fluctuation of crude oil price does not have much impact on the price of finished gasoline imported by enterprises, sometimes even the opposite happens, that is, crude oil decreases but the price of finished gasoline still increases or does not decrease...

Petroleum businesses also believe that with the decline in world prices, businesses importing goods at high prices and selling them at low prices will lead to losses, not to mention obvious inventory losses because imported goods must be stored for 30 days as prescribed.

Commenting on the recent downward trend in oil prices and the reaction of domestic enterprises, economic expert Ngo Tri Long said that with the sharp decline in crude oil prices, enterprises cannot say that "domestic gasoline prices in the coming period may not increase, decrease, or be difficult to decrease".

“Of course, domestic gasoline prices also depend on supply and demand, the market at the time the business imports, import prices and many other factors, not just the price of crude oil. However, businesses complaining about the difficulty of reducing domestic gasoline prices in advance is no different from “putting pressure or influencing” the authorities to consider adjusting gasoline prices,” said Mr. Long.

Dr. Nguyen Duc Do - Deputy Director of the Institute of Economics and Finance (Academy of Finance, Ministry of Finance) also acknowledged: "The price of finished petroleum products does not always fluctuate immediately with the price of crude oil in a short period of time, but with a long-term decline, the impact of a decrease in the price of finished petroleum products is certain. The price of finished petroleum products is only different from the price of crude oil because there are many other costs involved, but it cannot "go against the trend" compared to the price of crude oil, meaning that when crude oil decreases, finished petroleum products must also tend to decrease."

The fact that businesses and experts have different opinions clearly shows that these shortcomings in the petroleum business have not been thoroughly resolved, affecting more or less the price of petroleum and the interests of domestic consumers.

According to Gia dinh.net