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Domestic petrol prices must follow world’s prices: MoF
Head of the Price Control Agency under the Ministry of Finance Nguyen Tien Thoa talked about if it was illegal to approve the 1,000 dong per litre petrol price increase.
Could you please explain why the Ministries of Finance and Industry and Trade approved the petrol price increase of 1,000 dong per litre?
We had to accept a sharp petrol price increase because the world’s prices have been rising continuously.
The petrol price in the last 26 days has increased by $9.83/barrel (16.9 percent) if compared to the average price in April 2009. The kerosene price has increased by $7.3/barrel (12.4 percent), DO by $7.9/barrel (13.2 percent). Meanwhile, mazut price has soared dramatically by $70/tonne, or 24 percent.
With such high price levels in the world, all petrol importers have suffered heavy losses of over 1,000 dong per litre for all kinds of petroleum products.
On May 28, ministries sent a document to key importers, clearly stating that retail prices would not be adjusted in the immediate time. Meanwhile, the ministries gave a nod on the price increases just 10 days later. Do you think there is inconsistency in the petrol price regulation?
If enterprises still had to continue selling petrol at low prices, they would incur heavy losses, which would badly affect the petroleum market. If enterprises incurred losses continuously, while the state did not compensate them, they would lack capital, which could interrupt the supply of petrol.
Some days ago, ministries refused importers’ proposal on raising the retail price, while asking them to keep close watch over the world’s price. We have also slashed taxes and not asked enterprises to contribute to the petrol price stabilisation fund at this moment, in an effort to help ease burdens on businesses. However, businesses continue incurring losses which they can’t continue to bear.
The current regulations stipulate that the petrol price must not increase by more than 500 dong per litre at a time. Is the 1,000 dong per litre price increase illegal?
It is true that we stipulated that petrol price must not increase by more than 500 dong per litre each time. But the regulation can only be applied when we have the petrol price stabilisation fund. The fund has not been operational yet.
We have not put any dong into the fund from petrol sales, while we have got 80 billion dong from oil product sales, which is not enough to cover loss and stabilise petrol prices.
Will petrol distributors make profit with the price increase of 1,000 dong per litre?
The price increase is just enough to help enterprises break even, while they still cannot make profit.
What are your forecasts about the petrol price in the time to come?
Experts have said that the world’s price may hover around $60-70/barrel on the stronger dollar and world economy’s recovery. We cannot say if such a sharp price increase on the domestic market will occur in the time to come, we can just say that the domestic price must go according to the world’s prices.
Phuoc Ha
vietnamnet
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