Gasoline prices are subject to a fixed rate of 1,050 VND/liter and nearly a dozen types of taxes and fees.

From November 1st, the standard business cost for gasoline used to calculate the base price will increase to 1,050 VND/liter, instead of the previous 860 VND/liter stipulated in Decree 84 on gasoline and oil business.

Businesses will be allowed to increase their standard cost for gasoline by nearly 200 VND/liter.

The Ministry of Finance and the Ministry of Industry and Trade have officially issued Joint Circular No. 39, stipulating the method for calculating base prices; the mechanism for forming, managing, and using the Price Stabilization Fund; and the management of gasoline and diesel prices as prescribed in Government Decree No. 83 on gasoline and diesel business.

Accordingly, the standard cost of petroleum business, which is the cost of petroleum distribution (wholesale cost, retail cost at actual temperature) within the country for key traders (including costs for general agents and dealers) used to calculate the base price, has increased by nearly 200 VND/liter, to 1,050 VND/liter, instead of 860 VND/liter as before.

Specifically, the average cost across the country for gasoline is a maximum of 1,050 VND/liter; the average cost across the country for kerosene and diesel is a maximum of 950 VND/liter; and the average cost across the country for fuel oil is a maximum of 600 VND/kg.

The circular also stipulates that the pre-tax profit margin (i.e., profit from domestic petroleum business) of key traders used to calculate the base price is capped at 300 VND/liter/kg and will be adjusted by the Ministry of Finance to reflect the actual business performance of key traders in each period.

In addition, the Circular specifies the method for calculating the base price.

Accordingly, the base price of petroleum products includes the following factors: CIF price, import tax, special consumption tax, value-added tax, standard business costs, contribution to the Price Stabilization Fund, standard profit margin, environmental protection tax, and other taxes, fees, and contributions as prescribed by current law.

In this context, the CIF price is calculated as (=) the world price of petroleum (Platt Singapore price) plus (+) the costs of transporting petroleum from abroad to Vietnamese ports. The world price of petroleum is calculated as the average of the 15 days preceding the price calculation date of the mandatory petroleum reserve cycle.

Regarding the Fuel Price Stabilization Fund, the contribution rate remains at 300 VND/liter for all petroleum products. If necessary, the inter-ministerial committee will adjust the contribution rate and timing of the Price Stabilization Fund to reflect market fluctuations.

According to Infonet