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State urged to supervise petrol prices
While experts agree that the recent decision to allow petrol distributors and producers to set their own prices is punctual, they are also urging the State to continue supervising the petrol market.
Last Tuesday, the ministries of Finance and Commerce and Industry issued Decision No 79/2008/QD-BTC authorising petrol distributors and producers to set their own prices in line with market forces.
Nguyen Minh Phong from the Ha Noi Socio-Economic Research and Development Institute said that the State should have regulations to supervise the price because the domestic petrol market was not really competitive.
If traders could determine the prices by themselves, they could easily enter into a monopoly to unilaterally increase the price, which would impact against the interests of consumers, he said.
Tran Dinh Thien, deputy director of the Viet Nam Economic Research Institute, agreed with Phong.
"Floating the petrol retail price does not mean that traders have full control in determining the price," said Thien. "The State must still have tools to control the price to avoid a shock in the economy as world oil prices can fluctuate unexpectedly".
He said the State should have petrol reserves to meet domestic demand in case of fluctuations in the world market.
Deputy Minister of Trade and Industry Nguyen Cam Tu said the recent decision did not allow enterprises to fix whatever price they pleased. He said petrol came under a list of goods that must be kept stable, and changes in the price should be under State control.
Phong said the decision should not lead to any fluctuation in the domestic petrol market.
Petrol traders have applauded the decision, saying that price flexibility would encourage them to be more active in balancing supply and demand and find cheaper petrol sources. The calculation of the price would be based on fluctuations at home and abroad, tax rates and other charges, they said.
A Military Petroleum Company official said that having traders fix their own prices would help boost competition in the local market, bringing prices down and increase product quality.
Vuong Thai Dung, deputy general director of Viet Nam National Petroleum Corporation (Petrolimex), said that the State should provide guidance on implementing the decision to avoid problems, especially for commission fees. He stressed the State should maintain consistent policies to limit negative effects on businesses.
Dung noted that some inconsistencies had already risen. Decree 55 in April 2007 stated that enterprises must register changes in petrol retail prices with State authorities 48 hours before the price came into effect. However, the decision last Tuesday asked enterprises to register three days before, not including holidays and weekends.
Under the regulation, if world oil prices fluctuate during weekends or over local holidays, enterprises are stuck with their prices, he said, adding this would negatively impact enterprises and also consumers, who could benefit from price declines during these periods.
Deputy Minister of Finance Tran Xuan Ha said the new regulation on three days registration was only temporary. The period would be adjusted with what is reasonable, he said.
Earlier, the Government had asked the Ministry of Trade and Industry to change Decree 55 according to trends to create more favourable conditions for price adjustments.
VNN
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