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Province chairmen have authority to set commodity price frames
The Ministry of Finance (MOF) is drafting a circular guiding the implementation of Decree 75, which concretises the provisions of the Pricing Ordinance.
Provincial authorities have power to set price frames
The newly promulgated Decree 75 stipulates that there are 14 groups of key commodities whose prices need to be stabilised. These include petroleum, cement, steel, liquidised gas, medicine and rice.
The decree also stipulates that chairmen of provincial people’s committees have the authority to set up the lists of commodities and services subject to the price stabilisation for different periods after considering the specific conditions in the localities.
Price-stabilising measures will be taken if the market shows abnormal changes with prices going up or down too sharply. If non-petroleum prices increase continuously for 30 days (for example, cement, steel prices and transportation fees increase by 20%, or rice prices increase by 25%), price-stabilising measures will be applied.
What are price-stabilising measures? The state may take measures to harmonise supply and demand, like asking suppliers and producers to declare sale prices or register sale prices with state management agencies, or it may initiate monetary policies.
MOF thinks that the stabilising of petroleum prices will be carried out in accordance with the operation mechanism of the petroleum price stabilising fund, to be stipulated by MOF.
Nguyen Xuan Hoa, Deputy Head of the Market Policy Division under the MOF’s Price Control Agency, emphasised the authority of provincial chairmen in deciding commodities and services prices, adding that this is the noteworthy thing of the decree.
For example, service providers may take advantage of high tourism and festival seasons to raise hotel room rates or transportation fees. In this case, provincial chairmen have the right to set the room rate frames and no service provider is allowed to apply rates higher than those in the frame.
Besides the 14 commodity and service items subject to price stabilising, the decree also clearly stipulates 18 commodities and services the prices of which will be set by the state, including land, water and products for national reserves.
Controlling the factors that formulate prices
Hoa from MOF has also stressed the need to control the factors that formulate commodities and services prices.
Under the spirit of Decree 75, besides the 18 categories of commodities and services of which the state will define prices, the price registration scheme will be required for some other commodities.
The Price Control Agency said that MOF is considering adjusting Decree 169/2004 on punishing institutions and individuals violating the laws on price control. The punishment levels will be heavier in order to effectively deter violators.
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