VIETNAM, September 26 – Compiled by Thu Hà
HÀ NỘI — The government should carefully assess the effectiveness of the gasoline and oil price stabilization fund in keeping retail commodity prices stable before deciding whether to maintain or eliminate the tool, said experts.
Việt Nam plans to change the price law, which mentions several commodities under the government’s price stabilization program, including gasoline and oil.
Currently, the government uses the Gasoline and Oil Price Stabilization Fund to support its regulation of domestic gasoline and oil prices when necessary. Soaring oil prices on the global market in recent months have fueled rising retail gasoline and oil prices in Việt Nam, forcing state management agencies to use the fund to intervene on the market.
Experts have expressed concern because in the first price bill, which was published in June this year, the Ministry of Finance said that the price stabilization fund should then be eliminated gasoline and oil in order for this product to operate in accordance with market signals. However, in the second draft released recently, the government suggests keeping this fund without any assessment or review of the issue.
In a meeting last week to give opinions on the second bill, Speaker of the National Assembly (NA) Vương Đình Huệ pointed out that the government should consider different opinions on this issue, as well as the methods of corresponding treatment for each case.
NA Permanent Vice President Trần Thanh Mẫn said the revised law should be built on the basis of respecting the market price regulation mechanism to reduce state intervention. In addition, he must overcome the shortcomings related to corruption and group interests.
NA Economic Committee Chairman Vũ Hồng Thanh said the scope of the amendments to the law is very broad and will have a great influence on the production and business activities of many industries and fields across the country. The law was also linked to many other laws that would be amended in the near future, such as the Civil Code, land, business, public procurement and consumer protection laws. Therefore, the treatment of overlapping conflicts between the law on prices and the above-mentioned laws needed to be reviewed to ensure the consistency of the country’s legal system.
“There is a need for careful and cautious consideration to have more convincing explanations for each product and service included in the law,” Thanh noted.
According to Thanh, many companies have reported that the management of the gasoline and oil price stabilization fund has not been flexible and that the fund’s positive impacts on domestic gasoline and oil prices remain modest. .
The companies said gasoline and oil prices in Việt Nam fluctuate sharply with world prices for the foreseeable future, as the country’s gasoline supply could only meet 70% of domestic demand. If the fund could suffice in the event of slight increases, it was insufficient to respond to strong fluctuations. To make matters worse, it was found to inhibit price reductions because retailers had no incentive to improve their sales during times when domestic prices were lower than the international market.
Additionally, the companies urged the government to consider shortening the current price adjustment period from 10 days to five days to help petrol retailers cut spending.
NA Judiciary Committee Chair Lê Thị Nga also suggested there was a need to carefully consider the effects of the fund in recent gasoline price hikes before recommending whether to keep it or scrap it. .
Sharing the same view, economist Dr Bùi Trinh said state management agencies should seek to examine the impact of the oil price stabilization fund since its inception before drawing conclusions.
Trinh expressed support for the common view of other experts that the government should consider removing taxes as it seeks to reduce current oil prices, curb inflation and facilitate economic recovery.
During the meeting, Finance Minister Hồ Đức Phớc said that the second bill maintains the regulations on the fuel price stabilization fund, since the world price of the commodity is still unpredictable. The fund still played its necessary role of regulating domestic gas prices in order to minimize the negative impacts on the prices of other commodities.
“The proposal to maintain this fund is because, after evaluation, it is clear that the fund has created positive influences in the market, resulting in impressive benefits for the economy, especially in such a volatile year for fuel as 2022. “, did he declare. .
According to Phớc, without this fund, reliance solely on reduced taxes and service charges can only solve the problem in the short term. There are many synchronous measures to keep the price of oil stable. The fund is only a tool to stabilize the price of gasoline in addition to other tools such as taxes, charges and regulations on diversification of supply or price reduction for other costs . However, the ministry wants to keep the fund because it can help support the gas and oil adjustment as well as other measures. It is necessary to use the fund and other measures to stabilize the price of oil because oil and energy are two important areas of economic security that should be given special attention.
Also, it’s good to reduce taxes and fees as a short-term solution, but it’s very difficult in the long term. Once the reduction is made, it will be very difficult to increase taxes and fees later.
On September 21, gasoline and oil prices were adjusted downward by the Ministries of Industry and Commerce and Finance. The retail price of E5RON92 biofuel has fallen from VNĐ450 to VNĐ21,781 per litre, while that of the popular RON95-III gasoline has been reduced from VNĐ631 to no more than VNĐ22,584 per litre.
Diesel 0.05S and kerosene are now sold at 22,536 VNĐ and 22,441 VNĐ per litre, marking declines of 1,644 VNĐ and 1,977 VNĐ, respectively.
Meanwhile, the price of mazut 180CST has been reduced from VNĐ 383 to VNĐ 14,656 per kilo.
Since the beginning of the year, the domestic price of gasoline has undergone a total of 25 adjustments, including 13 increases and 11 decreases. Retail prices for E5RON92 and RON95-III biofuels are currently the same as October 2021.
The two ministries agreed to subsidize each liter of E5RON92 with VNĐ451, RON95 with VNĐ450, diesel with VNĐ300, kerosene with VNĐ300 and mazut with VNĐ741, from the Gasoline and Oil Price Stabilization Fund. —VNS