Monday, September 23 2019

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NA mulls cutting road fees

Update: August, 19/2019 - 23:24

The market price of petroleum would have to be accepted for the petrol price stabilisation fund to be removed. Photo baogiaothong.vn

HÀ NỘI — The National Assembly (NA) Standing Committee has proposed removing the road maintenance fund and petrol price stabilisation fund.

Nguyễn Đức Hải, Chairman of the NA's Committee on Finance and Budget said the legal system on managing and using the funds was complex and unclear. In addition, no agency at central or local levels had been assigned to manage the funds.

Hải said the collection for the funds has seen shortcomings and still depends on the State budget.

Meanwhile, the functions and tasks of the funds overlapped and were ineffective as they coincide with budget spending tasks.

The move would be a boon for many businesses as road fees have reduced their competitiveness.

On the road maintenance fund, Nguyễn Hữu Vinh, director of Nhật Quang Transport Company in HCM City, said road fees have always been a burden in transport because they are calculated into costs. However, the benefits for vehicle owners from the fees have been unclear.

Vinh said 1 per cent of the collection was used for the road maintenance fund’s management while 99 per cent was contributed to the fund at central level.

Notably, the management, use and payments of the road maintenance fund have caused debates about the rights of vehicle owners.

Nguyễn Chí Hoàng, director of Phượng Hoàng Transport Company said the situation of degraded roads has not been resolved.

In reality, the road maintenance fund has been a burden for transport businesses and vehicle owners. Therefore, the collection of road maintenance fees needs to be transparent and used for road maintenance. Vehicle owners pay road maintenance fees at registration centres once a year at quite high rates, but the benefits they enjoy are not quite clear.

“If we abolish the road maintenance fund and petrol price stabilisation fund, people and businesses will be happy to have reduced costs,” he said.

He added that if these funds can’t be abolished, it is necessary to change the way road maintenance fees are collected to ensure the rights of vehicle owners.

Meanwhile, the proposal to remove the petrol price stabilisation fund has received support, but some fear surging retail prices without the fund.

Nguyễn Anh Tuấn, director of Price Management Department under the Ministry of Finance, told Tuổi Trẻ (Youth) newspaper that there were many factors to consider before abolishing the petrol price stabilisation fund. Therefore, Decree No 83 on petrol trading should be revised with contents of price management, basis price and reserve.

Tuấn said when the Government still manages petrol prices, the Ministry of Industry and Trade would stipulate the basis price. Only when the State does not manage the basis price could the fund possibly be abolished.

Economist Ngô Trí Long said only when the country fully embraced the market price of petroleum could the fund be removed.

At present, with the Government and National Assembly's top targets stabilising the macroeconomy, curbing inflation and the State is operating petrol prices, it is impossible to remove this fund, Long said. — VNS

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