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Ministry eyes cut on price fixing

Update: September, 15/2016 - 10:45
The Ministry of Finance proposed the removal of price stabilisation funds for electricity, paddy and rice in a draft decree. — Photo vietnamnet.vn

HÀ NỘI – The Ministry of Finance proposed the removal of price stabilisation funds for electricity, paddy and rice in a draft decree.

Currently, the Government uses price stabilisation funds to achieve domestic price stabilisation for the products. It is used to avoid sudden increases in prices of the products to control inflation and ensure macro-economy stability.

In past years, the funds have served an important role in fixing the prices of the products, especially petroleum, during sensitive periods.

However, according to the finance ministry, the funds are now unnecessary.

Under the draft decree aimed to supplement some regulations of the Price Law, the ministry said that stablising power prices is not suitable as the country pilots a competitive power retail market next year.

There are also still some costs that haven’t been calculated in the retail power price.

The finance ministry quoted statistics from the Ministry of Industry and Trade as an example, saying that a loss of more than VNĐ1.682 trillion (US$75 billion) in the power industry due to foreign exchange rates by the end of 2014 hadn’t been calculated in the retail power price.     

As for paddy and rice, the finance ministry said the funds weren’t necessary as the products’ prices are currently under a market mechanism and are relatively stable.

The Government also implements programmes on buying paddy and rice for stockpile every year to stabilise the rice market, the ministry said. — VNS

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