Three options for Petroleum Price Stabilization Fund

VCN - According to the Ministry of Industry and Trade, the Petroleum Price Stabilization Fund is the only flexible tool for the State to control petrol prices in each price management period. Therefore, Price Stabilization Fund elimination also means quitting the petrol price management.
Balance of Petroleum Price Stabilization Fund remains about VND310.8 billion by the end of QII Balance of Petroleum Price Stabilization Fund remains about VND310.8 billion by the end of QII
Three options for Petroleum Price Stabilization Fund
Petroleum. Photo: T.D

Maintaining the Stabilization Fund

The draft Decree amending Decree 95/2021/ND-CP and Decree 83/2013/ND-CP on petrol and oil trading has been developed by the Ministry of Industry and Trade and sent for comments from ministries and sectors.

Regarding the management and use of the Petroleum Stabilization Fund, the Ministry of Industry and Trade said that the Petroleum Price Stabilization Fund is a financial fund that is not in the state budget balance. Instead, every source of provision and usage of this Fund is to participate in regulation and support for stabilizing domestic gasoline prices. The Petroleum Price Stabilization Fund operates not for profit, does not create a centralized management mechanism, creates an organizational structure, or has its own financial mechanism.

In response to the abandonment of this Fund due to its inefficiency, the Ministry of Industry and Trade analyzed the Draft because the Petroleum Price Stabilization Fund is the only flexible tool for the State to control the increase and decrease in gasoline prices in each price management period. Therefore, leaving the Price Stabilization Fund will mean quitting the petrol price management.

Over the past time, the Stabilization Petroleum Fund has been consistently used by the Inter-Ministry of Industry, Trade and Finance to stabilize gasoline prices following the law. The Petroleum Price Stabilization Fund has promoted a positive and practical effect in creating a "stepping stone" in price stabilization (stabilizing or reducing the increase) in case of necessity. It enables actively stabilizing petrol prices in a period or preventing domestic gasoline prices from rising too sharply, contributing to curbing inflation, stabilizing the macro-economy, maintaining growth and stabilizing social welfare security.

As a result, the Ministry of Industry and Trade has proposed 3 options for the Petroleum Price Stabilization Fund:

Option 1: Maintain the current regulations on the management of the Price Stabilization Fund;

Option 2: Continue to keep the tool of the Petrol Price Stabilization Fund to control the price of petrol, but there are modifications in the direction of stipulating the principle of using the specific Price Stabilization Fund tool.

Accordingly, the competent state agency only intervenes to control the price by adjusting the setting up and spending of the Price Stabilization Fund when there is a difference in this announced price compared to the previous announcement period of 10% or more or a reduction of 7% or more. This plan is to both ensure that the State can operate when necessary but gradually reduce the State's intervention in petrol and oil prices;

Option 3: Omit the petrol price stabilization fund.

Given this context, the Ministry of Industry and Trade chooses option 2, which keeps regulations on the price stabilization fund. Although, however, there are specific regulations on usages (extraction and spending), at the same time, the price formula has been changed in the direction that the State only publishes the directional price, including elements of world prices, taxes, normative profits, and other incurred costs are self-determined by enterprises and accountable to the auditing agencies.

The choice of option 2 is to ensure that gasoline prices gradually follow the market, fully reflect the costs incurred by businesses, harmonize interests between entities, and help maintain a stable supply for the market.

Shorten the time to announce petrol prices

In addition to the above content, in the Draft, the Ministry of Industry and Trade also commented on the adjustment of the operating time/price announcement.

Previously, according to the provisions of Decree No. 95/2021/ND-CP, the time for petrol and oil price management between two operating periods was revised down from 15 days (according to Decree No. 83/2014/ND-CP) to 10 days (specifically operating on the 1st, 11th and 21st of every month).

The 10 days is considered suitable for calculating business selling and importing prices following the price collection cycle to calculate the consumer price index (CPI) of the Statistics General Department. This adjustment also is to keep a relatively stable level to implement the business plan of the enterprise as well as the target of stabilizing the market.

However, based on the opinions of some units and the direction of the Government's leaders, in the Draft, the Ministry of Industry and Trade proposes two options for regulating petrol prices as follows:

Option 1: Maintain current regulations on operating time/publication of petrol and oil prices;

Option 2: Modifying in the direction of shortening the time for operating/announcing petrol prices to 7 days, specified on a specific day of the week

Stated its point of view, the Ministry of Industry and Trade chose option 2; the gap between the two administration/price announcement periods was reduced from 10 days to 7 days and regulated on Thursdays every week, excluding public holidays.

The reason is to ensure domestic gasoline prices are more closely aligned with the movements of gasoline prices in the world market. In addition, the operation will be carried out even on public holidays to avoid significant price fluctuations, affecting consumers' interests or petrol and oil businesses.

Ngoc Linh/ Thu Phuong

Related News

Reconfigure the global cashew supply chain to prevent disruptions

Reconfigure the global cashew supply chain to prevent disruptions

VCN - On February 27th, the 13th Vietnam International Cashew Conference officially opened in Dong Hoi City, Quang Binh Province. This event was part of Vietnam's National trade promotion program, organized in collaboration with the Vietnam Cashew Association (VINACAS) and the Ministry of Industry and Trade of Vietnam.
Ministry of Industry and Trade: more than 300,000 applications processed via NSW

Ministry of Industry and Trade: more than 300,000 applications processed via NSW

VCN – The Ministry of Industry and Trade connected 16 groups of public services with the Vietnam National Single Window (VNSW).
Opportunities to increase orders from the European market

Opportunities to increase orders from the European market

VCN - Despite facing numerous challenges related to new requirements and standards, Vietnam continues to be a destination that attracts special attention from investors and importers from the EU. This opens up opportunities for Vietnam to regain growth momentum after a period of decline due to the global economic impact.
Ministry of Finance proposed to abolish regulations on reviewing and making statistics of petroleum operating costs

Ministry of Finance proposed to abolish regulations on reviewing and making statistics of petroleum operating costs

VCN - The Ministry of Finance sent a document to the Government on the review and adjustment of the standard operating costs in the base price of petroleum. In particular, this agency proposed to remove the regulation on reviewing and making statistics of petroleum operating costs.

Latest News

Central bank urges card issuers to review procedures

Central bank urges card issuers to review procedures

The State Bank of Vietnam (SBV) has issued a directive, demanding commercial banks to review their procedures in issuing and managing bank cards.
Warning about impersonating tax authorities to commit fraud during  tax finalization month

Warning about impersonating tax authorities to commit fraud during tax finalization month

VCN - The Tax industry has continuously provided information and issued warnings about impersonating tax officials and tax authorities to commit fraud against taxpayers, but there are still people who fall into the trap of these fraudsters, especially during the peak month of tax settlement.
“3 priorities, 3 breakthroughs” in task deployment of State Treasury

“3 priorities, 3 breakthroughs” in task deployment of State Treasury

VCN - To complete the task from now until the end of 2024 and successfully implement the State Treasury Development Strategy as planned, Deputy Minister of Finance Bui Van Khang stated "3 priorities, 3 breakthroughs" " and 7 notes in task performance.
Effectively apply M&A to go long distance

Effectively apply M&A to go long distance

VCN - With advantages such as being cheaper than domestic capital, and accompanied by many factors such as technology, skills, management, market... foreign capital is a popular trend among businesses. Domestic enterprises seek through M&A activities to ensure sustainable development for the future.

More News

Hanoi State Treasury proactively digitizes and transforms operating methods

Hanoi State Treasury proactively digitizes and transforms operating methods

VCN - Hanoi State Treasury always proactively transforms and reforms its operating methods with the motto of “taking customers as the center” and taking the satisfaction of organizations and individuals as a measured level of task completion by civil servants.
The Ministry of Finance continues to strongly improve the business environment, reducing the rate of businesses temporarily suspending operations

The Ministry of Finance continues to strongly improve the business environment, reducing the rate of businesses temporarily suspending operations

VCN - The Ministry of Finance aims to continue to strongly improve the business environment, create a healthy competitive environment, rapidly increase the number of newly established businesses, and reduce the rate of businesses temporarily suspending operations; reduce input costs and legal compliance costs in investment and business activities, reduce policy risks, strengthen trust, create a fulcrum for recovery and improve business resilience.
Vietnam tackles obstacles to stock market upgrade

Vietnam tackles obstacles to stock market upgrade

Vietnam's ambition to elevate its stock market from "frontier" to "emerging" status by 2025 faces two key hurdles, including pre-trade margin requirements for foreign investors and foreign ownership ratios in certain sectors, said Deputy Director of the Securities Market Development Department under the State Securities Commission (SSC) Pham Thi Thuy Linh.
Looking forward clear instructions in tax finalization in 2023

Looking forward clear instructions in tax finalization in 2023

VCN - Mr. Hoang Quang Phong (photo), Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) discussed supporting taxpayers in tax finalization in 2023.
Proactive in dealing with exchange rate pressure

Proactive in dealing with exchange rate pressure

VCN - Recently, the State of Bank (SBV) withdrew VND 30,000 billion through the T-bills channel, contributing to reducing exchange rate pressure. This is just one of the moves of the monetary policy management agency to stabilize the foreign exchange market, contributing to supporting the macro economy as well as import-export business activities of enterprises.
Tax sector accompanies and supports tax finalization

Tax sector accompanies and supports tax finalization

VCN - In the first months of 2024, the Tax sector has deployed peak months to support tax finalization in many different forms, thereby solving many problems in settlement of corporate income tax and personal income tax for taxpayers.
Minister of Finance: Fairness and transparency for the insurance market

Minister of Finance: Fairness and transparency for the insurance market

VCN - According to Minister of Finance Ho Duc Phoc, the Ministry has strengthened inspections to correct violations in the insurance sector, demonstrating fairness and transparency in the market.
Vietnamese securities companies race to boost capital amid high market demand

Vietnamese securities companies race to boost capital amid high market demand

These companies understand the importance of boosting their capital to remain competitive and avoid falling behind their peers.
Central bank required to take urgent measures to stabilise gold market

Central bank required to take urgent measures to stabilise gold market

The Government has directed the State Bank of Vietnam (SBV) to urgently inspect and supervise to stabilise the gold market.
Read More

Your care

Latest Most read
Central bank urges card issuers to review procedures

Central bank urges card issuers to review procedures

The State Bank of Vietnam (SBV) has issued a directive, demanding commercial banks to review their procedures in issuing and managing bank cards.
Warning about impersonating tax authorities to commit fraud during  tax finalization month

Warning about impersonating tax authorities to commit fraud during tax finalization month

VCN - The Tax industry has continuously provided information and issued warnings about impersonating tax officials and tax authorities to commit fraud against taxpayers, but there are still people who fall into the trap of these fraudsters, especially dur
“3 priorities, 3 breakthroughs” in task deployment of State Treasury

“3 priorities, 3 breakthroughs” in task deployment of State Treasury

To successfully implement the State Treasury Development Strategy as planned, Deputy Minister of Finance Bui Van Khang stated "3 priorities, 3 breakthroughs" " and 7 notes in task performance.
Effectively apply M&A to go long distance

Effectively apply M&A to go long distance

VCN - Sharing at the conference "Consumer goods and distribution industry: M&A trends and investment strategies to raise capital for Vietnamese enterprises", organized by the Business Association of High Quality Vietnamese Goods and the Leading Business C
Hanoi State Treasury proactively digitizes and transforms operating methods

Hanoi State Treasury proactively digitizes and transforms operating methods

Hanoi State Treasury always proactively transforms and reforms its operating methods with the motto of “taking customers as the center” and taking the satisfaction of organizations and individuals as a measured level of task completion by civil servants.
Mobile Version