Ministry submits final draft on petrol trading

Update: June, 25/2014 - 09:25
Consumers buy their fuel at a Petrolimex petrol station in Tran Hung Dao Street in Ha Noi.— Photo

HA NOI (VNS) — The Ministry of Industry and Trade, recently submitted its final draft of the amended Decree to the Government on the trading of petrol.

The Decree No 84/2009/ND-CP, issued in 2009, allowed traders to control the retail price of petrol in the local market. Accordingly, traders were able to increase the retail price by 7 per cent if wholesale prices surged by the same percentage.

However, the draft, if approved, will allow traders to increase the retail price by only 3 per cent irrespective of the fluctuation in wholesale prices.

The draft says, additional cost will be calculated and managed by the State Price Management Agency, adding that if the wholesale prices increase more than 7 per cent, the Government will step in to manage fuel prices in the market.

According to Industry and Trade Minister Vu Huy Hoang, the draft will bring local fuel prices more in sync with world prices and boost competitiveness among petroleum firms. It will also end monopoly and serve consumers better.

However, economist Ngo Tri Long told that the draft, which still lets traders control prices, does not help consumers at all. Long said the local fuel market did not have any real competition as over half of the total 21 fuel traders were part of the Viet Nam National Petroleum Group or Petrolimex.

Economist Vu Dinh Anh added that among 11 petroleum importers in Viet Nam, Petrolimex accounts for almost 60 per cent of fuel supply while Viet Nam Oil and Gas Group or PVOil accounts for nearly 20 per cent.

Anh suggested that the State should determine the market price by setting a ceiling price on fuel products so that traders have to strive to reduce the cost of fuel management, lower prices and attract customers.

The ministries of Finance and Industry and Trade announced higher retail prices for petrol, kerosene and mazut from 8pm on Monday.

Petrolimex, the country's largest fuel wholesaler increased the price of fuel. Each litre of petrol cost another VND330 (US$0.015) at VND25,230-25,730 ($1.20-1.22) while an addition of VND170 was put on kerosene, which was now VND22,540 ($1.07). Mazut was also sold at VND18,860 ($0.89), an increase of VND270 ($0.012) per litre. — VNS