Gasoline and diesel are making huge profits.

Despite a 1% tax reduction by the Ministry of Finance and a sharp drop in imported gasoline prices, petroleum companies have chosen to increase dealer discounts rather than lower production costs.

Simple and compound interest businesses

Ten days after the Ministry of Finance issued a circular increasing gasoline tax from 16% to 19% and diesel tax from 13% to 17%, raising the tax burden on consumers to 8400 VND/liter, on May 23rd, the gasoline tax was adjusted down by 1%, reducing the tax burden on consumers to 7300 VND.

In response to this move, instead of lowering prices for consumers, the main distributors resorted to their familiar tactic: increasing discounts for gasoline import dealers. The main distributors increased discounts for retail gasoline dealers from 650 to 950 VND/liter.

Retail gasoline prices remain unchanged. At the time of the tax adjustment, retail gasoline prices were still at 23,330 VND/liter for Ron A92 gasoline and 23,850 VND/liter for Ron A95 gasoline.

The profit from the gasoline tax reduction is now going into the pockets of businesses, adding another 900 VND per liter of gasoline.

In fact, this profit is much higher due to the downward trend in global oil prices. On average, the price of refined gasoline in Singapore, which Vietnam uses as a reference, is only around $111.2 per barrel. This is compared to $111.4 per barrel 10 days prior. From May 18th to May 24th, the price of refined gasoline decreased by approximately 2.4%.

Thus, businesses are benefiting from a double advantage: they are benefiting from both reduced taxes and lower input costs.

Furthermore, the price of refined gasoline is currently much lower than the price in the same period of 2012. However, 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, and 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%. After several adjustments, the current gasoline tax rate is 18%. Simultaneously, the contribution to the Price Stabilization Fund for gasoline and diesel remains at 300 VND/liter.

Explaining this absurdity, leaders of Petrolimex Group and the Ministry of Industry and Trade both complained that the regulations governing gasoline prices and tax provisions were implemented very inadequately.

Are consumer rights being ignored?

The message regarding market-based governance was further emphasized by Deputy Minister of Industry and Trade Nguyen Cam Tu, prioritizing the interests of the people first, followed by businesses, and then the State.

In reality, the above sequence has been reversed; gasoline price adjustments are always based on the interests of businesses.

That's why, when the price of imported gasoline dropped sharply, instead of adjusting gasoline prices to match market prices, the government resorted to a policy that was not in the best interests of consumers. The tax adjustments are clearly only adding to the enormous profits of the major players in the gasoline industry.

On the afternoon of May 26th, a representative from a major trading company stated that world prices fluctuated, but mostly decreased, with increases being insignificant. The reduction in tariffs to 18% will certainly make business somewhat easier.

Economist Dr. Luu Bich Ho, former Director of the Institute for Development Strategy, affirmed that taxes and fees are tools for managing gasoline prices. The issue of slow price decreases and rapid price increases is the biggest problem in the petroleum industry, a topic that is constantly debated. However, it seems that the regulatory agency is protecting the interests of businesses while neglecting the rights of consumers.

Businesses operate primarily for profit. Therefore, when there's an opportunity to make a profit, there's no point in reporting "I made a profit."

The Ministry of Finance and the Ministry of Industry and Trade are responsible for overseeing and regulating petroleum products, and they are tasked with reviewing whether prices are reasonable. If businesses are already making a profit, adjustments and early intervention are necessary to protect consumer rights.

According to Dat Viet (HV)