The State only intervenes to regulate and manage in specific conditions

Revised Price Law: Removing problems of price negotiation

Mr. Tran Van Lam

How do you evaluate the newly revised points of the Law on Prices?

The draft Law on Prices (amended), proposed and approved at this National Assembly session, has been studied, reviewed, absorbed and revised to synthesize the most comprehensive opinions and comments from National Assembly deputies and participating agencies and organizations. Up to this point, the issues raised in the draft Law submitted to the National Assembly have received the high consensus of the drafting agencies, the verifying agencies and the National Assembly Standing Committee.

Compared with the previous draft, the draft Law has carefully reviewed the list of goods to be valued, the list of goods stabilized by the State, etc. Based on the criteria and principles set forth, the agency The drafters have also reviewed other price-related laws to create consistency in the legal system and achieve high consensus among relevant ministries and sectors. In addition, several policies related to price stabilization tools, standard price adjustment ranges, and floor prices have been calculated, considered, reviewed and adjusted accordingly. In particular, this draft Law on Prices (amended) also has many regulations to improve the quality of valuation work, creating favourable conditions for businesses, organizations and individuals to implement this work.

Many opinions are still controversial about the issue of removing the floor price, keeping the ceiling price of domestic air passenger transport services. What is your view on this matter?

- This is very interesting content in the draft Law on Prices (amended). Up to this point, in the draft Law on Prices (amended), it is still determined that the ceiling price and the floor price should be removed for domestic air transport. This is an innovative step based on the criteria and principles set out and identified in the draft Law to conduct the selection.

Generally, the Law on Prices is a tool for the State to manage and regulate prices. In a market economy, prices are set by the market and formed voluntarily based on market principles and rules. The State only intervenes to regulate and manage specific conditions. The first characteristic is that there is a monopoly factor that distorts the supply-demand relationship. The second characteristic is that abnormal weather factors disrupt the supply-demand relationship in natural disasters, requiring State intervention.

Although the market has many airlines participating in domestic air passenger transport services, its monopoly nature has not been completely eliminated. In some routes, there is fair, relatively transparent and clear competition, but there are still many routes that only one airline operates; if it is called for many airlines, it is not possible due to the small number of passengers. There are also seasonal factors at certain times and periods. Therefore, the current aviation industry is competitive and transparent, but the monopoly factor cannot be eliminated. Therefore, the State still needs to intervene to a certain extent through the regulation of ceiling prices, combined with floor prices, also to protect the interests of consumers in the context of competition to avoid unfair competition.

Stabilizing petrol prices or stabilizing prices of essential commodities is a very important content to control inflation Photo: Internet

Whether to keep or abandon the fund to stabilize petrol prices is still controversial; in your opinion, which direction should this issue be?

Currently, stabilizing petrol prices or stabilizing prices of essential commodities is very important to control inflation and maintain macroeconomic stability, thereby creating conditions for production and business development.

The management price stabilization is a tool to set up a price stabilization fund not only for petrol but also for any strategic commodity to regulate. Establishing the petrol and oil price stabilization fund falls under the Government's authority. The principle is to ensure many criteria and principles such as publicity, transparency and efficiency to ensure the interests of people and businesses are not taken advantage of for other purposes.

In fact, over the past time, thanks to the price regulation management tools, the price of petrol and other commodities has been managed and regulated by the Government, creating relative stability, thereby stabilizing the macroeconomy, controlling inflation, even during epidemics, world energy crisis, high inflation volatility in major economies. Therefore, there is no reason for us to discard this tool. Moreover, soldiers in battle need many weapons; if we take away any tools, it will affect the ability of the Government to operate.

Price stabilization by funds is just a tool; each tool is only effective in a certain space certain conditions. Provided that the price fluctuations are not too large, this tool can be regulated, but if the price fluctuations are many times larger than the fund, then it must be combined with many other tools that the Government has done and reported to Congress, such as reducing taxes. The assessment of whether this price stabilization fund has been established and correctly used is a matter of administration and enforcement, not a matter of law.

In addition, world experience shows that it is necessary to create reserves in addition to the price stabilization fund, but currently, we do not have enough potential, so we must use the price stabilization fund. Furthermore, due to the specificity of the budget, mobilizing people to advance this fund and implementing socialization measures to stabilize gasoline prices is also serving the people following the context of the country's conditions.

Recently, the Petroleum Price Stabilization Fund still has some limitations in management and operation. Therefore, the Government has accepted this opinion and will be responsible for management, publicity and transparency so that people can trust and rest assured that this fund is effectively used for the right purpose.

Thank you, Sir!