The Ministry of Finance answers petitions on raising electricity, petrol and oil prices

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Illustrative photo.

Regarding proposals of Hanoi voters, the Ministry of Finance said that according to current regulations, the State managed the prices according to the market mechanism to respect the right to self-determination and price competition of business organizations and individuals according to the provisions of the Law.

With electricity and petroleum being two essential commodities, important for economic development and people's life, therefore, current legal documents must stipulate the mechanism for managing and regulating them.

Electricity Price: Careful adjustment

According to regulations, the Ministry of Industry and Trade is assigned for State management of electricity prices and the Ministry of Finance is the coordinating agency.

In order to implement the State-regulated electricity market price, the Ministry of Industry and Trade submitted to the Prime Minister a Decision No. 24/2017/QD-TTg dated 30 June 2017 to adjust the average retail electricity price.

According to the Decision No. 24, the average annual electricity prices are considered and adjusted according to objective changes of input of all stages (electricity generation, electricity transmission, electricity distribution, operation, management and electrical system auxiliary services) to determine the current average electricity price.

Accordingly, one of the factors to consider and adjust is the basic input parameters in the generation of electricity fluctuations compared with the parameters that have been used to determine the current average electricity price.

Performing the function of State management of prices in general, and the task of coordination in State management of electricity prices, the Ministry of Finance said that the plans to adjust electricity prices of Vietnam’s electricity was controlled by the Ministry of Industry and Trade as prescribed.

The time and adjustment are carefully considered, avoiding the adjustment of electricity prices, which has a great impact on macroeconomic stability and social security.

After the adjustment of electricity prices, the Ministry of Industry and Trade has carried out propaganda to better understand the principles for adjusting electricity prices. At the same time, in order to contribute publicly and transparently the price constituents, from 2011, the Ministry of Industry and Trade publicized the annual electricity production and trading costs.

Petrol price according to market mechanism

According to the Ministry of Finance, the mechanism of petrol and oil price adjustment will be implemented in accordance with Decree 83/2014 / ND-CP dated 3 September 2014, with the basic principle as follows,"petrol price is applied based on market mechanism under the State management".

According to the Decree 83, the Ministry of Industry and Trade is assigned to preside over the price of petrol and oil; and the Ministry of Finance is the coordinating agency.

Petrol dealers shall be entitled to set selling prices within a certain range, according to the process and principles, which must not be higher than the base price. When the price rises, or the price increases affecting socio-economic development and people's lives, the Ministry of Industry and Trade will coordinate with the Ministry of Finance to apply price stabilization measures through tools to stabilize prices or not to raise prices so high which may cause adverse impacts on socio-economic development, inflation control, macro-economic stabilization and social security.

Since Decree 83 came into force (1 November 2014), the management of petrol prices in Vietnam has been consistently implemented in accordance with the market price mechanism under the State management.

The domestic petrol prices basically follow world oil prices, ensuring the harmonious sharing of interests among the State, enterprises and consumers.

At the same time, based on the principle of transparently implementing the petrol and oil price, the Ministry of Industry and Trade has issued a press release announcing the change of petrol price in the world, base price, and principle of the necessity of regulating petrol prices in the country.

In addition, in the past time, the petrol price stabilization fund has been used correctly, contributing to stabilizing petrol prices in the country, which does not let prices rise too high, impacting on socioeconomic development. At the same time, the domestic petrol price increase will be reduced.

Increase the environmental protection tax frame with petrol and oil mainly to actively respond when needed VCN- That is one of the assertions of Mr. Pham Dinh Thi - Director of Tax Policy ...

The Ministry of Finance shall also periodically inspect the setting up and use of petrol and oil price stabilization fund of key oil and petroleum trading enterprises according to the provisions of Decree No. 83. The setting up and use of funds to stabilize the price of each petroleum business from 2013 until now shall be publicized regularly so that people can know and supervise.