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Cooking gas prices could go down by 20 percent
Local prices of liquefied petroleum gas (LPG) are likely to be adjusted next month as complaints gather pace about businesses fixing retail prices much higher than world prices.
Lai Duc Nam, sales and marketing manager of Petronas Vietnam, said LPG prices on the world market have dropped by US$285 per ton within ten days and the fuel is now traded at about $515 per ton.
The drop means the retail price of a 12-kilogram cylinder in Vietnam can be cut by as much as VND62,000, he said.
However, as local companies have a large amount of LPG purchased at high prices, the adjustment rate next month will only be between VND40,000 and 50,000.
LPG now retails locally at VND253,000 per cylinder. The recent drop in world oil prices recently has pulled down prices of oil-based products, including LPG. But in Vietnam, the retail price of cooking gas has been almost the same for more than a month.
The director of an LPG company said businesses will suffer huge losses if they cut retail prices in accordance with the drop in world prices.
“Like businesses in the steel industry, businesses trading in gas are suffering huge losses, and consumers need to share the difficulties,” he said.
Tran Trung Chinh, deputy general director of VT Gas, said local businesses had to face many difficulties over the past ten months after Thailand stopped exporting LPG to Vietnam, forcing them to turn to more expensive supply sources.
Chinh, who is also chairman of an association grouping 10 local LPG trading companies, said due to the lack of large storage facilities for LPG in the country, businesses cannot sign long-term contracts to purchase large quantities of the gas.
The large number of gas cylinders refilled illegally on the market has also hurt their business, he said.
According to all local businesses, they import LPG under term contracts. Prices are determined at the end of each month and kept unchanged for the whole of next month.
As a result, businesses cannot changed their retail prices in the middle of a month even if there is a rise or fall in the global prices, noted Le Phuc Dai, director of Vinagas.
But a professional negotiator, who wished to be unnamed, said such explanations for a delay in price adjustment are unconvincing.
When prices fluctuate too much, it is possible to ask to negotiate and make adjustments to signed contracts, he said.
Businesses with extensive experience always add a clause to their contracts allowing price adjustments in case market prices rise or fall to a certain level, he said.
Nguyen Thi Thai Thuy, a consumer, said it is unreasonable to say prices cannot be lowered in the middle of the month because local retail prices were often increased right after world prices started to rise.
A business in the import-export sector should always know how to forecast how prices will change, she added.
Ho Tat Thang, vice chairman of the Vietnam Standard and Consumer Association, said the association has asked the Ministry of Finance and the Ministry of Industry and Trade for permission to conduct an inspection of the domestic LPG market.
There are many issues concerning prices, quality and safety that can affect the interests of consumers, he said.
World LPG prices have dropped sharply but domestic prices are still kept unchanged, which shows that local businesses mean to fix prices among themselves, he said, noting the same situation has occurred with local gasoline traders.
Thang suggested authorities take more drastic measures to prevent businesses from hurting consumers.
Hoang Tho Xuan, director-general of the Ministry of Industry and Trade’s domestic market policy department, said businesses trading in LPG are required to register their prices with the authorities because LPG is among the essential products subject to the government’s policies to stabilize prices.
However, as the Ministry of Finance has yet to issue a circular instructing LPG businesses on this mechanism, the authorities can, at present, carry out inspections and ask businesses to adjust their prices based on market conditions, Xuan said.
Thanhnien
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