Creating a healthy and competitive environment for petroleum business

VCN - Talking to Customs News, Prof. Dr. Nguyen Thuong Lang, Institute of International Trade and Economics, National Economics University, said that it should have solutions to increase competitiveness in the petroleum business, but it was not possible to let the market self-regulate without the help of regulatory agencies.
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Three options for Petroleum Price Stabilization Fund Three options for Petroleum Price Stabilization Fund
Prof. Dr. Nguyen Thuong Lang
Prof. Dr. Nguyen Thuong Lang

What do you think about focusing on a focal point in the operation and management of petroleum?

Petroleum is a strategic commodity, not only for Vietnam but also for the whole world. The volatility of petroleum affects not only consumers but also the stability of the macroeconomy, especially related to the consumer price index, and inflation.

Therefore, relevant agencies must protect the rights and interests of the people and the economy. The Ministry of Industry and Trade is the agency that manages and licenses focal traders and distributors of petrol and oil, guides the implementation of petrol and oil trading and distribution activities, guides the implementation of import and export activities, and ensures the stable supply of petrol and oil. So that, they will understand the nature of the factors that form the base price in order to manage gasoline prices appropriately.

However, every issue has its strengths and weaknesses, but it is worth noting that petroleum always fluctuates, while the capacity of the domestic management agencies cannot control the situation.

Therefore, the focal point of petroleum management is not as important as the smooth coordination among agencies, ministries and branches. Referring to a focal point is a suitable situational solution, eliminating the extrusion of responsibility when occurring unusual fluctuations, but in the long term, there should be continued good coordination among the parties.

Because if a single agency is to run a monopoly, it can lead to a monopoly on power and governance, so it can lead to risks to group interests and local interests. With a market economy, a monopoly will eliminate healthy competition.

As for the management of petrol prices, how should this improve in the future, Sir?

Despite the management of petrol and oil prices having fluctuations, it also saw certain achievements, in which, the establishment of the Petroleum Price Stabilization Fund has adjusted prices reasonably and combined with the mechanism of exemption and reduction of a number of taxes and fees related to petroleum for the economy, enterprises benefit.

Therefore, we need to continue to maintain the Petroleum Price Stabilization Fund, because it demonstrates the role of the State in protecting the interests of consumers, protecting the interests of units, organizations and individuals related to petroleum.

However, in addition to cash reserves, reserves in kind such as petroleum, which can be up to 3 months, 6 months or a year help the impact of this stabilization fund to spread more substantively and effectively.

In my opinion, the State still has to join hands in operating and managing the price of petrol and oil, the price of petrol and oil can not be completely floated for the market, because the volatile market will not be able to fully meet and protect the interests of people and enterprises as the State.

However, these supports should be implemented as the Prime Minister has repeatedly shared the view of “harmonious benefits, shared risks”.

In addition, although the management of petroleum can be assigned to a focal point, there must be coordination of information among relevant agencies. There needs to be a mechanism to communicate fully with each other, for example, the Consumer Association must inform about how much consumers lose with the current gasoline price, the level of support, with the Association of Transporters, what is the impact that enterprises use a lot of petroleum.

As for the management agency, the Ministry of Finance needs information on the state of the budget, import and export; the Ministry of Industry and Trade informs about a matter of supply, and market demand to calculate and handle appropriately.

Therefore, publicity and transparency will be a top priority. In addition, we must have an independent department to monitor and supervise price management, ensuring harmonious benefits for the economy and life.

Along with the management, in your opinion, how should petroleum business be managed to be fair and competitive?

Currently, the Ministry of Industry and Trade is collecting opinions for the Decree amending and supplementing Decree 95/2021/ND-CP and Decree 83/2014/ND-CP of the Government on petroleum trading, which also proposed many solutions to increase competitiveness in the petroleum business, but still need more improvement.

I think that, in order to compete fairly, we must increase the number of importers. The competition is high, and enterprises will have to find the most reasonable strategies, ensuring the most benefits for people and enterprises to dominate the market, and consumers will benefit.

Regarding the division among business agents, I think that there must be a regulation on the discount rate, helping enterprises to be more stable and secure in their business activities.

But in the long run, we should set a new "mission" for the revised decree on the petroleum business mentioned above that can be put into law, so that there is a strong enough legal mechanism for operating and managing petroleum, helping to stabilize the market as well as create a healthy and competitive business environment for enterprises.

Thank Sir!

Bu Huong Diu/ Binh Minh

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