It is necessary to maintain the Petroleum Price Stabilization Fund

VCN- In Vietnam’scurrent conditions, the petroleum price stabilization fund is still necessary to regulate domestic petroleum prices, contributing to macroeconomic stability, controlling inflation as well as protecting consumers’ interests. However, operating the Petroleum Price Stabilization Fund requires flexibility in accordance with practice.  
tin nhap 20190605155010 "Businesses should keep calm when there are only a few months of negative fuel price stabilization funding"!
tin nhap 20190605155010 Ministry of Industry and Trade’s statement on concern for scarcity of petroleum?
tin nhap 20190605155010 Increase of petroleum price does not affect inflation control
tin nhap 20190605155010
The petrol price stabilization fund is a tool for the State to regulate domestic petrol and oil selling prices in order to harmonize the interests of consumers, enterprises and the State. Photo: Nguyen Thanh.

Effective economic measures

In a recent discussion at the National Assembly on socio-economic development, Deputy Prime Minister VuongDinh Hue elaborated on many issues related to curbing inflation this year, including mention of petroleum management.

The Deputy Prime Minister stated thatin 2019, the Steering Committee for Price Management based on five calculation scenarios have selected the operating scenario to control the Consumer Price Index (CPI) from 3.3-3.9% and continue to persevere this goal in the future. In order to achieve this goal, the Government is expected to implement a number of key solutions, including measures to actively monitor the market supply and demand developments and prices to developstabilization solutions, especially for some essential goods such as electricity and petrol prices.

"In the future, we will continue to adjust domestic petroleum prices in line with the movements of world oil prices and use price stabilization tools like the Petrol Stabilization Fund to ensure macroeconomic stability,"Deputy Prime Minister VuongDinh Hue said.

Previously, the most prominent point in recent times is the petition to abolish the petrol price stabilization fund sent by the Vietnam Petroleum Association (VINPA) to the Government. According to the document from theVINPA,the setting up of petroleum price stabilization fund at VND 300/liter according to the provisions of Decree 83/2014/ND-CP on petroleum business is causing consumers to suffer more than profits when considering quality, people are paying for the fund. The use of the petroleum price stabilization fund with bold administrative intervention should distort the price of the petroleum market.

In fact, Deputy Prime Minister VuongDinh Hue affirmed using the petrol price stabilization fund to ensure macroeconomic stability, the keeping or giving up of the price stabilization fund was mentioned many times by the leadership of Ministry of Industry and Trade. According to Deputy Minister of Industry and Trade Do Thang Hai,the petroleum market has not fully operated in accordance with the market nature and it is controlled by the State, so leaving the fund at the present time is not appropriate.

“The fund's principle is when the balance is closed; it is difficult to take it out when it is difficult. After ten years of operating gasoline prices, we see this as an effective economic measure. This is not an administrative intervention. In fact, personally, I do not want to have the Oil Stabilization Fund. However, at the present time, there is still a need for a fund, which needs a managerial role of the State,”stressed Deputy Minister Do Thang Hai.

Economist Ngo Tri Long provided additional comments. In the context, gasoline prices are being priced by the State, it is necessary to have the Price Stabilization Fund. State management of prices must have useful tools in hand – when world prices rise, the Fund will help to discharge stabilization of gasoline prices.

It needs to be flexible

Regarding petroleum management, in the report 229/BC-CP of the Government sent to the National Assembly on May 21, about the management of electricity and petrol prices, the Ministry of Industry and Trade inherited the Prime Minister's authorization on some related content. In which: "Petrol and oil in the list of conditional business lines, under the list of goods and services subject to price stabilization as stipulated in Law on Price No. 11/2012/QH13. In principle, the domestic petrol and oil selling price must be implemented according to the market mechanism with the State's regulation and management, the petrol price stabilization fund is a tool for the State to regulate petrol and oil selling prices in order to harmonize the interests of consumers, enterprises and the State, therefore, if the Fund to stabilize the price of petroleum is removed, the State will no longer have the tools to regulate domestic petroleum prices, contributing to economic stability, controlling inflation as well as protecting consumer interests."

In fact, it is easy to see, in the latest operating period of gasoline price on June 1, the Ministry of Industry and Trade and Finance also changed quite flexibly in setting up the price stabilization fund, the amount set for E5RON92 gasoline is 100 VND/liter; continue to maintain the level of setting up the price valorization fund for RON95 and other current oil products at300 VND/liter. According to the inter-ministry, in the last 15 days, due to the influence of political issues and trade tensions between major countries, the price of petroleum products in the world market has fluctuated. In order to contribute to stabilizing prices of consumer goods, controlling inflation, stabilizing the macro economy; based on the actual situation of the petrol price stabilization fund, the inter-ministry continues to spend the price stabilization fund on E5RON92 gas with a lower cost than the previous period can reduce E5RON92 price to the most reasonable level, while increasing the Petrol Stabilization Fund, and encouraging bio-petrol consumption.

In the operating petroleum business, Assoc. Pham The Anh (Hanoi National Economics University) expressed his view: "For petroleum business, to survive and promote the role of the petrol price stabilization fund,the market needs to be placed on top. Besides, the petrol price stabilization fund must be used flexibly and should not be used in a blameless manner."

To better implement the management and administration of petroleum business, report 229 / BC-CP stated: The Government has directed the Ministry of Finance to preside over and coordinate with the Ministry of Industry and Trade and related agencies to continue to monitor, research, evaluate and review amendments to tax regulations, study the regulation of environmental protection tax for bio-petrol E5 and E10, in accordance with the emission levels to the environment. The Ministry of Industry and Trade shall continue to review and study to reduce some investment and business conditions in the petroleum sector in order to create more conditions for businesses to participate in petroleum business activities to the next petroleum market, more competitive and better supply; coordinate with the Ministry of Finance and relevant agencies to continue studying and proposing amendments and supplements to Decree No. 83/2014/ND-CP to better improve the management and administration of the petroleum market.
By Hanh Nguyen/Bui Diep

Related News

Striving for average CPI not to exceed 4%

Striving for average CPI not to exceed 4%

VCN - According to the report of the Ministry of Finance, there are still some factors that put pressure on price levels in the remaining months of 2024, so the Ministry has updated 2 scenarios of average inflation in 2024 increasing in the range of 3.7-3.92%.
Managing price effectively, reducing pressure on inflation

Managing price effectively, reducing pressure on inflation

VCN - Timely and effective price management helps control the consumer price index (CPI) and inflation in accordance with the set target.
There should soon be more mechanisms to control land speculation by imposing taxes

There should soon be more mechanisms to control land speculation by imposing taxes

VCN - The sudden high auction price of land can create a trend of land speculation. In order for land auctions to be transparent and increase revenue for the budget, the State needs to soon have more mechanisms to control speculative activities by imposing taxes, targeting those who accumulate and speculate instead of those who buy real estate for living purposes or organizing production and business, the factor of accumulated assets will decrease.
Promptly disseminate policies and enhance effectiveness of state management of prices

Promptly disseminate policies and enhance effectiveness of state management of prices

VCN – Currently, the legal system on prices has been comprehensively completed, improving the effectiveness of state management of prices by ministries, branches and localities.

Latest News

Many factors affecting tuna exports in the last months of the year

Many factors affecting tuna exports in the last months of the year

VCN - Tensions between Israel and Iran escalate, tuna businesses are worried, they may have to stop export orders to the Israeli market in the last months of the year.
Vietnam still dominates Philippine rice import

Vietnam still dominates Philippine rice import

Vietnam continues to assert its dominance as the top rice exporter to the Philippines, with 2.91 million tonnes shipped as of the late October, or over 79% of the Philippines' total rice imports, according to the Vietnam Trade Office in the Philippines.
Vietnam cements ties with partners to engage in global semiconductor, AI industries

Vietnam cements ties with partners to engage in global semiconductor, AI industries

By boosting cooperation with reputable partners across the globe, Vietnam is taking steps to gain a foothold in the world’s semiconductor and artificial intelligence (AI) industries.
Aquatic exports expected to rise in year-end despite challenges

Aquatic exports expected to rise in year-end despite challenges

Aquatic exports is expected to surge in the remaining months of this year, as the year-end festive season comes, despite many challenges in the international markets, according to insiders.

More News

Trade Defense: The Key to Success for Vietnamese Businesses

Trade Defense: The Key to Success for Vietnamese Businesses

VCN - From losses and near bankruptcy, many domestic enterprises have recovered thanks to timely application of trade defense measures. Trade defense is also an effective shield for Vietnamese enterprises against a series of lawsuits from importing countries, thereby maintaining advantages and developing on "away grounds".
Lao Cai Customs sees a triple-digit surge in export-import turnover

Lao Cai Customs sees a triple-digit surge in export-import turnover

VCN - Updated from the beginning of the year to October 24, total import and export turnover through Lao Cai Customs Department increased by 102%.
Coconut is expected to become a billion-dollar export item

Coconut is expected to become a billion-dollar export item

VCN - Talking to the press at the ceremony to launch the first train carrying fresh coconuts to China, Mr. Luu Van Phi, Director of the Department of Industry and Trade of Tien Giang province, said that Vietnam's agricultural export potential, especially fresh coconuts, is expanding with the appearance of international railway transportation from Song Than station.
Plastic exporters interested in converting to recycling technology

Plastic exporters interested in converting to recycling technology

VCN - The Vietnamese plastics industry is facing major challenges in terms of plastic waste and recycling needs. Secretary General of the Vietnam Plastics Association Huynh Thi My (pictured) shared important information about the transformation in production of plastics enterprises to meet increasing export demands.
Logistics sector must embrace innovative trends to stay competitive

Logistics sector must embrace innovative trends to stay competitive

The Vietnamese logistics industry must adapt to new trends and enhance infrastructure to remain globally competitive, speakers said at an event in Ho Chi Minh City on October 31.
Vietnam’s agro-forestry-aquatic product exports likely to set new record

Vietnam’s agro-forestry-aquatic product exports likely to set new record

Vietnam’s agro-forestry-aquatic product exports are likely to achieve a record high of 62 billion USD in 2024, said Deputy Minister of Agriculture and Rural Development Phung Duc Tien.
UKVFTA greatly benefits Vietnam-UK trade: Experts

UKVFTA greatly benefits Vietnam-UK trade: Experts

The UK-Vietnam Free Trade Agreement (UKVFTA), signed into law three years ago, has clearly benefited trade cooperation between the two countries, particularly in the context of Vietnam’s exports to most other major markets declining due to geopolitical tensions and headwinds in the global economy, said experts at a conference in Hanoi on October 30.
Agricultural exports likely to exceed 60 billion USD amid challenges

Agricultural exports likely to exceed 60 billion USD amid challenges

With swift production recovery and continued growth, Vietnam's agricultural sector could potentially surpass the 60 billion USD export target, according to the Ministry of Agriculture and Rural Development (MARD).
Vietnam-Philippines trade likely to exceed 8 billion USD for first time

Vietnam-Philippines trade likely to exceed 8 billion USD for first time

With the current rising trend, trade between Vietnam and the Philippines is likely to exceed 8 billion USD for the first time to hit about 8.5 billion USD in 2024, with Vietnam’s surplus of more than 3 billion USD, according to the Vietnamese Trade Office in the Philippines.
Read More

Your care

Latest Most read
Many factors affecting tuna exports in the last months of the year

Many factors affecting tuna exports in the last months of the year

VCN - In recent years, Israel has always been Vietnam's leading tuna export market after the US and the EU. Therefore, the recent escalation of Israel-Iran tensions is affecting Vietnam's tuna exports to this market.
Vietnam still dominates Philippine rice import

Vietnam still dominates Philippine rice import

Vietnam continues to assert its dominance as the top rice exporter to the Philippines, with 2.91 million tonnes shipped as of the late October, or over 79% of the Philippines' total rice imports, according to the Vietnam Trade Office in the Philippines.
Vietnam cements ties with partners to engage in global semiconductor, AI industries

Vietnam cements ties with partners to engage in global semiconductor, AI industries

By boosting cooperation with reputable partners across the globe, Vietnam is taking steps to gain a foothold in the world’s semiconductor and artificial intelligence (AI) industries.
Aquatic exports expected to rise in year-end despite challenges

Aquatic exports expected to rise in year-end despite challenges

Aquatic exports is expected to surge in the remaining months of this year, as the year-end festive season comes, despite many challenges in the international markets, according to insiders.
Trade Defense: The Key to Success for Vietnamese Businesses

Trade Defense: The Key to Success for Vietnamese Businesses

VCN - From losses and near bankruptcy, many domestic enterprises have recovered thanks to timely application of trade defense measures. Trade defense is also an effective shield for Vietnamese enterprises against a series of lawsuits from importing countr
Mobile Version