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When Decree 83 is amended, the petrol price stabilization fund should be maintained. Photo: Nguyen thanh.

New points

Talking about the revision of Decree 83, Mr. Tran Duy Dong, Director of the Domestic Market Department (Ministry of Industry and Trade), said the regulation on business conditions and the petrol distribution systemarethe main amendments. Through the review, as well as the recommendations of some localities and enterprises, Vietnam Petroleum Association showed that there are still some itemsthat need to beamended, such as conditions on warehouses and wharfs; regulations on ownership and co-ownership of petrol stations; petroleum trading rights of merchants; regulations on laboratories.

These itemscause difficulties for state management agencies because they are unclear or inconsistent, and at the same time, cause difficulties for petrol and oil trading enterprises to reach conditions or have requirements to waste social resources.

For the petroleum price mechanism, according to Mr. Dong, the coordination mechanism between the Ministry of Industry and Trade and Finance via issuing joint circulars is not right according to the law on the promulgation of legal documents. Therefore, the task assignment and the coordination mechanism between the two ministries will be reviewed on the basis of the contents prescribed in Joint Circulars No. 39/2014 / TTLT-BCT-BTC and the Joint Circular No. 90/2016 / TTLT-BTC-BCT to include in the revised Decree 83 and re-arrange chapters and sections accordingly.

Regarding thepetrol basic price calculator, Mr. Dong said when setting up Decree 83, the source structure was mainly imported petroleum (about 70%). The formula for calculating basic petrol and oil prices based on cost corresponding to import sources. However, up to now, with the change of supply structure (domestic production accounts for 70-75%); the number of main businesses increases, increasing competitiveness; the participation in free trade agreements (FTAs) resulted in many different import tax rates on petrol and oil from markets and regions having preferential tariffs. In addition, changes in excise tax policy; changes in the financial structure apply to petroleum products of Binh Son Petrochemical Joint Stock Company, leading to review and revise the formula for calculating base price based on cost factors from two sources (domestic and imported, determine import tax rates from different sources to include in the price calculation formula). This is to restructure a common price for adjusting the retail price of gasoline in Vietnam.

"In the regulation on the formula for calculating the base price, there are specific instructions on the import tax rate to apply the import price which is suitable for aggregation from import sources with different tax rates," Mr. Dong said.

In addition to the above contents, the amendment of Decree 83 also reviews the regulations on import tax on petroleum, the recording and accounting at petrol and oil trading enterprises, on management of petrol quality.

Maintaining the Price Stabilization Fund

The need for the Price Stabilization Fund has been mentioned many times. According to the Vietnam Petroleum Association: The petrol price stabilization fund extracts 300 VND / liter as prescribed in Decree 83 makes consumers suffer, in essence, people are making prepayments for the fund. The petrol price stabilization fund is anadministrative intervention, thus distorting petrol market prices.

In this amendment, the role of the Petrol Price Stabilization Fund was also mentioned. Mr Tran Duy Dong said: This amendment is still under the Government's view that the market economy is under state management. To regulate andintervene, there must be tools. The tool used here in Decree 83 has been used very effectively, flexibly as a price stabilization fund for petrol."

Up to now, according to the Government's direction and opinion as well as the most recent meeting of the Drafting Board, including the ministries and branches, the Ministry of Industry and Trade and the Finance Ministry, haveagreed that in the draft of Decree still has a petrol price stabilization fund,"Dong said.

Regardingthe petrol price stabilization fund, Deputy Minister of Industry and Trade Do Thang Hai confirmed: "The petroleum market has not yet fully operated in accordance with the nature of the market; there is still the administration of the State so it is not appropriate to leave the fund at the moment. The principle of the fund is that when it is over, the State will closeit and when it is difficult, the State will take it out. I hope to leavethe petrol price stabilization fund as soon as possible. However, at present, the funds and a management role of the State are needed.”

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Mr. Dong spoke more about the amendment of Decree 83, in order to further enhance the openness, transparency and responsibility of the petroleum business in taking out, using and managing the balance of the petrol price stabilization fund, need to review, amend and supplement the reporting and monitoring mechanism (the balance of fund accounts at banks) and there should be clear provisions in the Decree to punish violations (such as revenue revocation of operation licenses of main enterprises) in case petrol and oil wholesale business do not take out and transfer the fund balance as regulated.At the same time, it is necessary to review and revise regulations on calculation of interest rates and financial sources in case the wholesale petrol and oil enterprises use the fund while the fund is negative.