Results of the State Audit of the Fuel Price Stabilization Fund
The State Audit Office has just announced the results of a thematic audit on the establishment, management, and use of the Fuel Price Stabilization Fund for the period 2009-2010.
According to the audit report's conclusions, the allocation and use of fuel price stabilization funds by fuel businesses in the past period have been carried out quite seriously in accordance with State regulations.
The amount allocated to and used by key petroleum businesses in the price stabilization fund is generally consistent with the amount allocated and the amount used from the price stabilization fund.
The discrepancies between reported and audited figures are due to the lack of clarity and specificity in some guidelines issued by the Inter-Ministerial Monitoring Team regarding the establishment and use of the Price Stabilization Fund. This has led to misunderstandings among key enterprises, resulting in incorrect and incomplete implementation.
Ten enterprises and two entities were audited this time, including the Ministry of Finance, the Ministry of Industry and Trade, Vietnam National Petroleum Corporation (Petrolimex), Vietnam Oil Corporation (PV Oil), Technical and Investment Trading Company (Petec), Ho Chi Minh City Petroleum Company Limited, Dong Thap Petroleum Trading Company, Aviation Petroleum Company Limited, Military Petroleum Corporation (Mipeco), Mekong Petroleum Company, Maritime Petroleum Trading Company (Vietnam Maritime Corporation - Vinaline), and Thanh Le Import-Export Trading Corporation.
The audit results show that the amount allocated to the Price Stabilization Fund through 10 key petroleum trading companies over these two years was 5,554 billion 661 million VND.
Specifically, in 2009, petroleum wholesale businesses implemented the establishment of a Price Stabilization Fund (according to Circular 56/TT-BTC; Circular 159/TT-BTC; Circular 56/TT-BTC and other guiding documents from the Inter-ministerial Monitoring Team of the Ministry of Finance and the Ministry of Industry and Trade).
The audit results determined that the total amount of the Price Stabilization Fund that needed to be allocated at the 10 key entities was 970,908 million VND; in reality, the 10 key enterprises had allocated 1,006,881 million VND. The amount allocated exceeded the required amount for the Price Stabilization Fund by 35,973 million VND. In 2010, the required amount was 4,583,753 million VND, while the 10 enterprises had allocated 4,561,559 million VND. Thus, the additional amount that needed to be allocated was 22,194 million VND.
However, there are still limitations in the operation and guidance of the mechanism for establishing, managing, using, and settling the Price Stabilization Fund, causing confusion for businesses. Some factors in the actual price structure, such as foreign exchange rate differences and interest rates during and after circulation, are not yet regulated in the basic price structure (Decree 84/2009 does not include these factors).
Furthermore, under the allocation mechanism, when petroleum distribution companies participate in price stabilization tasks and incur losses, they are still required to contribute to the Price Stabilization Fund. These companies must use their own capital to contribute to the fund. If retail prices are lower than the base price, there will be no consumer-funded Price Stabilization Fund.
This leads to increased costs and higher base prices; in that case, establishing a Price Stabilization Fund becomes meaningless, businesses that are already incurring losses will suffer even more losses, and the Price Stabilization Fund is created but is not real because if the selling price is already lower than the base price, there will be no fund.
According to the State Audit Office, based on the inspection report of the Department of Corporate Finance (Ministry of Finance), petroleum businesses generally comply well with regulations on the establishment, management, and use of the Price Stabilization Fund (only one company, Aviation Construction Company Limited, has not fully complied with the reporting requirements).
The State Audit Office believes that the Fund model has the advantage of being established within the enterprise, being accounted for separately, and only used for price stabilization. Therefore, when the State allows enterprises to use the Fund, they have basically used it promptly to respond to the world market, reducing administrative procedures (having financial resources to import gasoline and oil immediately).
In addition to stabilizing domestic fuel prices, the Price Stabilization Fund also contributes to overall price stability, inflation control, macroeconomic stability, maintaining growth, and ensuring social security.
For consumers, thanks to the mechanism of establishing, managing, and using the Price Stabilization Fund, in 2010, consumers were able to use gasoline and diesel at cheaper prices than in other countries in the region, reducing the frequency and extent of price adjustments.
However, the Fund still has some drawbacks, such as the potential for risk, the inability to separate the interest generated from the unused balance of the Price Stabilization Fund. Leaving the Fund at the enterprise level has limitations in terms of transparency, the risk of misuse by enterprises for other purposes, and the high risk to the Fund without preventative measures, as well as the inability to separate the interest generated from the Fund.
The State Audit Office also recommended that audited enterprises adjust the amounts allocated, used, and remaining in the Price Stabilization Fund, and report their financial statements and business results for 2009 and 2010 in accordance with the State Audit Office's findings; and strictly implement the mechanism for allocating, managing, using, and settling the Price Stabilization Fund in accordance with the regulations in Decree 84/2009/ND-CP…/.
(According to VNA/Vietnam+)
