"Almost no need to use the Petroleum Price Stabilization Fund"
In the most recent adjustment period (October 10), the price of E5 RON 92 gasoline increased by VND990/liter, to VND19,840/liter; RON 95 gasoline increased by VND1,260/liter, to VND21,060/liter. The price of diesel increased by VND1,100/liter, to VND18,500/liter; the price of kerosene increased by VND1,140/liter, to VND18,790/liter; and fuel oil increased by VND15,910/kg.
Since the beginning of the year, gasoline prices have increased 20 times and decreased 20 times. Oil prices have increased 17 times and decreased 23 times. Since October 2023, the Joint Ministry has not set aside or used the Petroleum Price Stabilization Fund. This has led many to question whether this fund still has a role in stabilizing the market.
In the September 2024 Industrial Production and Trade Activity Report just released by the Ministry of Industry and Trade, the Ministry explained the reason for not using the Petroleum Price Stabilization Fund.
According to the Ministry of Industry and Trade, since implementing the 7-day reduction in gasoline prices according to Decree No. 80/2023 on gasoline trading, domestic gasoline prices have been consistent with world gasoline price developments.
Along with that, the types of petroleum business costs are updated promptly, creating motivation for businesses to create petroleum sources to fully supply the needs of the domestic market.
The Ministry of Industry and Trade said that with the implementation of a price adjustment cycle of 7 days/time, the price fluctuation between two adjustments is not large, and domestic gasoline prices closely follow world price developments.
Therefore, businesses can proactively calculate prices, plan to import goods according to the minimum total source allocation for 2024 of the Ministry of Industry and Trade and register quarterly plans for gasoline supply.
"The impact of adjusting gasoline prices on the socio-economic situation is not large, and there is almost no need to use the Petroleum Price Stabilization Fund. This contributes to the goal of controlling inflation and ensuring the harmony of interests between businesses and gasoline users," said a report by the Ministry of Industry and Trade.
Regarding the balance of the Petroleum Price Stabilization Fund, the Ministry of Finance said that the balance of the Petroleum Price Stabilization Fund as of the end of the second quarter of 2024 is VND 6,061 billion.
Need a Stabilization Fund in kind
From a business perspective, talking to Lao Dong about the fact that the Petroleum Price Stabilization Fund is not used, Mr. Nguyen Xuan Thang - Director of Hai Au Phat Petroleum Company said that the use of the Petroleum Price Stabilization Fund is implemented according to the provisions of Circular 103/2021 of the Ministry of Finance on the expenditure level of the Petroleum Price Stabilization Fund.
The fund is only used by the Inter-Ministry when the difference between the base price of the announced period and the base price of the previous period immediately preceding the management period increases by 7% or more. Therefore, although the price of gasoline and oil has increased in the recent management period, the base price increase of most gasoline and oil products is below 7%, so the fund cannot be drawn.
In addition, the scandal in the management and use of the Petroleum Price Stabilization Fund by key traders in the past, which was pointed out by the Government Inspectorate, has not been summarized or evaluated. Therefore, the operator will limit the impact on the spending and use of the Petroleum Price Stabilization Fund.
Economist Vu Vinh Phu - former Deputy Director of the Hanoi Department of Industry and Trade said that the Petroleum Price Stabilization Fund is the people's money, but people do not know how it is extracted and spent. At times, the price of gasoline reached 21 - 22 thousand VND/liter, public opinion demanded that the fund be used to compensate for the high price of gasoline, but the management agency replied that it was reserved for use when the price went up.
“During the implementation process, the fund revealed more shortcomings than its effect on stabilizing the market. Because the fund was kept in enterprises, it was sometimes used for the wrong purposes, even violating the law…”, he said.
Therefore, the expert proposed to abolish the Petroleum Price Stabilization Fund. However, when abolishing this fund, there must be a "Stabilization Fund in kind" (petrol) to replace it. Because now we still depend on the world.
"The price stabilization fund must be large enough to reserve for the country for 3-6 months, only then will it be able to stabilize the market when necessary," said Mr. Vu Vinh Phu.
