Why are businesses proposed to decide their own gasoline prices?
In the appraisal file of the 3rd draft decree on petroleum trading sent to the Ministry of Justice, the Ministry of Industry and Trade maintained the same position as in the April draft, that the State will not regulate domestic retail fuel prices. Instead, businesses (dealers and distributors) calculate and determine retail prices on their own based on factors announced by the State.
The management agency will announce the average world price every 7 days and some fixed costs (foreign exchange rates, special consumption taxes, VAT, import taxes).
Based on this data, the focal business will add business expenses and profit norms to calculate the maximum selling price. The retail price to consumers cannot be higher than this maximum level. Particularly in remote areas and islands, an additional 2% is added. The new point is that they will have to declare prices and notify the management agency for supervision.
The Ministry of Industry and Trade said that the draft regulations demonstrate the drafting agency's listening to businesses' proposals, while also carefully observing market developments in the period of 2022 - when the crisis hits. Petroleum takes place around the world and in Vietnam.
Accordingly, in 2022, the outbreak of the Russia-Ukraine conflict puts heavy pressure on global oil and gas supply, and crude oil prices fluctuate erratically. Sometimes it's very high and sometimes it's very low, causing great pressure on businesses.
At that time, petroleum businesses continuously made petitions to the authorities about the State calculating cost prices that were not close to the actual business costs of the businesses, causing businesses to suffer losses. This is also the reason why some gas stations are closed, consumers have to wait in long lines to buy gas.
Many opinions say that allowing businesses to calculate, announce and decide retail gasoline prices on their own may raise concerns about the risk of "price collusion" between businesses; Or many opinions say that businesses calculate and announce prices themselves.
Regarding this issue, Associate Professor, Dr. Dinh Trong Thinh - Academy of Finance commented that the State still has enough tools to control prices. Because the Decree clearly states, "the selling price of gasoline and oil of the major gasoline and oil traders on the market must not exceed the price calculated according to the formula specified in the Decree. Businesses are forced to "declare prices and notify management agencies for supervision".
Thus, gasoline prices have a ceiling price, businesses can proactively calculate and announce prices below that ceiling, and must regularly report to management agencies. This is a tool for state management agencies to keep gasoline prices under control, preventing businesses from arbitrarily announcing prices, affecting people's lives as well as macroeconomic indicators.
In addition, state management agencies will be responsible for inspecting and inspecting petroleum business in accordance with regulations. Any agency or enterprise that does anything wrong will be responsible before the law.
Proposal to allow focal traders to set wholesale prices at level one
Talking to Labor, Mr. Nguyen Xuan Thang - Director of Hai Au Phat Petroleum Company Limited said that from the conference to develop Decree 83, 95 to 80 on petroleum business, it seems that the content of the decrees are all built based on the benefits of petroleum focal enterprises. If the focal enterprise is allowed to decide the retail price on its own, it will be "like a tiger growing wings".
This can lead to consequences such as retail businesses being forced to discount, having costs appropriated and benefits not being distributed according to regulations; making the petroleum market chaotic, unfair and prone to local disruption.
Therefore, Mr. Thang proposed allowing wholesale traders to set wholesale prices at level one; Allows distributors to set second-level wholesale and retail prices; Allow petroleum retail businesses to decide retail prices.
"In case the State regulates the retail price, I suggest that the domestic business cost and profit of all 3 stages be 3,000 - 5,000 VND/liter and the State issue a specific division ratio for the 3 stages, clear and transparent with additional circulars to replace Circular 103 guiding methods of setting up, spending, using, and managing the Petroleum Price Stabilization Fund, or specific regulations in the new decree," Mr. Thang said. .