There are still limitations and obstacles
In the recent period, although there are still some aspects in management and administration that need to be researched for further improvement, overall, the management of petroleum business activities, especially price management, has been closely followed by the regulatory agency in accordance with current decrees and legal documents as well as world prices.
At the seminar "For a stable, transparent, and efficient petroleum market" held on July 30, National Assembly Deputy Hoang Van Cuong - Member of the National Assembly's Finance and Budget Committee - said that the Government has made great efforts to manage and stabilize petroleum prices with three main tools: Through base prices, tax tools, and price stabilization by setting up a price stabilization fund.
However, there are still limitations, although the State controls prices and sets prices, the prices still have to follow the world. Moreover, petroleum prices still have the administrative command nature of the State imposing prices on petroleum trading enterprises.
When administrative imposition is used, it does not ensure the benefits in terms of profits calculated by the business activities of that enterprise. In case of excessive imposition, enterprises will naturally find ways to evade when they no longer see benefits.
Regarding the tax tool or using the price stabilization fund tool, in essence, we are using the resources of the budget or the resources of the people to create price stabilization rather than using the market's strength tool. This leads to the situation where this policy is equalizing. Enterprises that invest well in business also sell at that price, and poorly performing enterprises also sell at that price. That is, it does not create price competition in the market.
If we let the market decide, those enterprises will naturally try and strive to reduce input costs. Not adhering to a common price will encourage enterprises to create potential and good business capabilities," Mr. Cuong said.
Enterprises should decide the prices
According to National Assembly Deputy Hoang Van Cuong, the policy management reform in the future must focus on changing the mechanism. The current management mechanism is using the State's administrative management mechanism, so it should shift to market tools, letting the market regulate, thereby allowing enterprises to freely determine prices to have competitiveness.
The State will have tools to regulate if enterprises sell at non-market prices or collude to sell at high prices. We can use tax tools such as import tax and income tax to regulate, forcing enterprises to think about increasing sales volume, selling at lower prices for more benefits rather than controlling sales volume to increase prices.
"We also cannot completely let go but must use modern tools to stabilize petroleum prices. For example, globally, large companies often use derivative tools to stabilize. Besides, there must be national reserve resources, and there must be a market so that everyone can participate in good transactions," Mr. Cuong affirmed.
According to Mr. Bui Ngoc Bao - Chairman of the Vietnam Petroleum Association, regarding State management, in the future, it is necessary to ensure energy security and supply for the economy. Additionally, it is necessary to ensure the management of the general price level so that there are no strong impacts or when the world fluctuates strongly, we use fiscal policies through taxes, stabilization mechanisms to handle, and let the market operate.
When there is competition, the trend is always to achieve a price level that benefits consumers, besides, the accompanying regulations of an international nature must be applied, which are policies using derivative operations. Derivatives here are not purely financial investments but are price hedging operations, that is, petroleum price insurance.
