Gasoline is making huge profits

Despite the 1% tax reduction by the Ministry of Finance and the sharp drop in imported gasoline prices, petroleum companies have chosen to increase dealer discounts and are determined not to lower prices.

Business simple interest compound interest

After 10 days, the Ministry of Finance issued a circular increasing the gasoline tax from 16% to 19% and oil from 13% to 17%, raising the tax and fee that consumers have to pay to 8,400 VND/liter. On May 23, when the gasoline tax was adjusted down to 1%, it reduced the tax and fee that consumers have to "bear" to 7,300 VND.

Responding to this move, instead of reducing prices for consumers, the main enterprises used the familiar trick: increasing discounts for gasoline import agents. The main enterprises increased the discount for retail gasoline agents from 650 VND to 950 VND/liter.

Retail gasoline prices remain unchanged. Retail gasoline prices at the time of tax adjustment remain at VND23,330/liter for Ron A 92 gasoline and VND23,850 for Ron A95 gasoline.

Profits from reducing gasoline tax are going into businesses' pockets by an additional 900 VND/liter of gasoline.

In fact, this profit is much higher because the world oil price is on a downward trend. On average, the price of finished gasoline in Singapore, where Vietnam takes the reference, is only around 111.2 USD/barrel. Meanwhile, this price was 111.4 USD/barrel 10 days ago. From May 18 to May 24, the price of finished gasoline decreased by about 2.4%.

Thus, businesses are benefiting from double benefits, both from tax reduction and from reduced input prices.

In addition, the price of finished gasoline at this time is much lower than the price in the same period in 2012. But the selling price is still 630 VND/liter higher than the price of gasoline in the same period last year. Specifically, before June 7, 2012, the price of RON 92 gasoline was 22,700 VND/liter, diesel was 21,200 VND/liter. At the same time, the Ministry of Finance also increased the import tax on gasoline by 3%, to 7%. And after many adjustments, the current gasoline tax is 18%. At the same time, the deduction level for the Price Stabilization Fund for gasoline and oil is still 300 VND/liter.

Explaining this absurdity, the leaders of Petrolimex and the management agency of the Ministry of Industry and Trade both complained that the documents governing gasoline prices and tax provisions were implemented very inappropriately.

Consumer rights ignored?

The message of market-based management mechanism was also emphasized by Deputy Minister of Industry and Trade Nguyen Cam Tu, prioritizing the interests of the people first, enterprises second, and the State third.

In fact, the above sequence has been reversed, the adjustment of gasoline prices always takes the starting point from the interests of businesses.

That is why when the price of imported gasoline dropped sharply, instead of adjusting gasoline prices to match market prices, the government turned to applying a policy that did not stand on the side of consumer interests. The tax adjustment is clearly filling the huge profit pockets of the gasoline industry giants.

On the afternoon of May 26, a representative of a major enterprise said that world prices have increased and decreased, but mostly decreased and increased insignificantly. Reducing the tax to 18% certainly makes business a bit easier.

Economist Dr. Luu Bich Ho, former Director of the Institute of Development Strategy, affirmed that taxes and fees are tools to manage gasoline prices. The story of gasoline prices decreasing slowly and increasing rapidly is the biggest problem of the gasoline industry that cannot be stopped. However, it seems that the management agency protects the interests of businesses and forgets the interests of consumers.

Businesses are in business for profit. Therefore, when there is a chance to make a profit, it is foolish to report "I made a profit".

The Ministry of Finance and the Ministry of Industry and Trade are responsible for monitoring and managing petrol prices. If businesses are making profits, they need to make adjustments and intervene early to protect consumer rights.

According to Dat Viet (HV)