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Two powerful ministries’ undercurrent debate not terminated
The year 2011 has ended, but the fierce debate between the two powerful Ministries of Industry and Trade, and Finance has not finished yet. Every ministry still insists on its viewpoint on the petroleum pricing.
In September 2011, people one witnessed the “battle of words” between Deputy Minister of Industry and Trade Nguyen Cam Tu and Minister of Finance Vuong Dinh Hue at a workshop held at the Vietnam Chamber of Commerce and Industry (VCCI), relating to the petroleum product pricing mechanism.
At that time, Tu, who was believed to speak on behalf of petroleum enterprises, affirmed that petroleum distributors were incurring big losses because they have to sell petroleum products at the cost prices, and that the Ministry of Finance needs to allow raising the retail petroleum prices to rescue them.
Meanwhile, Hue believes that petroleum importers did not suffer losses, and that it would be better not to raise the sale prices in order to help curb inflation. Hue stated that Petrolimex, which is holding 60 percent of the market share, and other petroleum distributors would have their finance reports audited, if necessary, to clarify the issue.
At the workshop, the Ministry of Industry and Trade (MOIT) affirmed that the Ministry of Finance (MOF) made a mistake when asking enterprises to reduce the petrol prices on August 26. Meanwhile, MOF affirmed it made a right decision.
On December 19, a press conference was held to declare the result of the auditing at four petroleum enterprises, where MOF admitted that the enterprises are incurring loss. However, MOF said that if the heavy dong/dollar exchange rate fluctuations had not occurred, and if enterprises had not paid too much on commissions for sales agents, they would have made profit.
The conference made people think that the verbal battle between the two ministries came to an end, when the losses of enterprises were clarified. However, analysts have pointed out that the battle has never ended, which has turned into an undercurrent conflict.
The quietness in the next three months was just an “artificial peace”. Just two week after the press conference, at a press briefing of the Central Committee for Propaganda, MOIT kicked off a new debate.
The debate was once again, about the petroleum pricing. While MOF criticized enterprises for paying overly commissions, which led to high business costs, MOIT said that the costs were really at the deepest low already.
While MOF affirmed that if enterprises had practiced thrift, they would have made profit, while MOIT said that all the enterprises are incurring loss.
After the meeting, a representative of MOIT told Vietnam Economic Forum’s reporters of VietNamNet that MOIT, the management agency of petroleum enterprises, did not know anything about the press conference where the audit results were released. He said MOIT had sent a dispatch to MOF, requesting to provide documents about the press conference, but it had not got reply by that time.
It is clear that there exists a disagreement between MOIT and MOF, which can be seen not only in the spoken words which cannot be considered as “pleasant,” but also in the viewpoint on petroleum product pricing mechanism.
After the noisy debate in September, MOF once made a statement that the two ministries had reached an agreement on managing the petroleum prices in accordance with the market rules. However, it seems that this was just a “superficial handshake.”
MOIT is believed to be on enterprises’ side in this case, because it supports their proposals to raise retail prices. Of course, MOF, which struggles for low retail prices, has won the heart of people.
Pham Huyen
vietnamnet
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