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Petrol price decrease unlikely: official
Vo Van Quyen, Deputy Director of the Domestic Market Department, said that it is not likely a petrol price decrease will occur in the time to come.
How will the domestic petrol price respond if the world’s crude oil price decreases?
The Ministries of Industry and Trade and Finance have consulted with big oil firms in the world. They have all predicted that the world’s oil price will go down. Some reliable sources said that the oil price may fall to $80/barrel.
However, the problem is that the market is always unpredictable due to uncertainties in politics, or natural calamities.
The petrol import tax has been raised from 0% to 5%, which helps regulate the market. With the current price levels, the 5% import tax rate proves to be the most suitable.
So, the petrol price needs to be considered from many angles, the consumption level and the world’s price tendency, the inventory volume and financial health, and anti-smuggling activities, in both the short term and long term.
The basic principle for defining the petrol price is that the price must ensure the benefit of the state, enterprises and consumers as well. Besides, it is also necessary to consider the competitiveness of the economy, while these factors are changeable.
If the world’s oil price goes down further, the import tax increase of petrol may be considered. However, if considering current conditions, there is no great possibility of a petrol price decrease.
Do you think that the decision on slashing diesel prices and floating the petrol price at this moment is a suitable decision?
It is reasonable to slash diesel prices at this moment. The price ups and downs in the world’s market all have direct impacts on the domestic market.
The tendency of oil to decrease in price was seen in late July and early August. Meanwhile, macroeconomic factors have become better. Both are favourable conditions for Vietnam to regulate the domestic market on the principle of the market economy.
You have mentioned favourable conditions, what about the difficulties?
Petrol and oil companies suffered heavy losses at the beginning of the year. The state only compensated them for losses in diesel sales, not for losses in petrol sales.
Meanwhile, the government requested that enterprises keep big inventories in order to ensure socio-economic stability. Therefore, when the world’s price began decreasing, enterprises still had big stocks which cost more than the world’s price level and the current sale price.
By the end of July, the losses enterprises had suffered from petrol sales had reached VND3tril.
With the current petrol sale price, some enterprises have broken even and got profit, others are still incurring losses, but just a little. It is okay for kerosene, while the losses from mazut sales have decreased. As for diesel, the cost price proves to be higher than the current sale price.
VNN
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