Vietnam government revises fuel trading mechanism

Vietnam’s Deputy Prime Minister Nguyen Xuan Phuc announced that the government has decided to amend the three-year old Decree 84 on petrol and oil trading mechanism. The minister said that some provisions on base price components in the regulations have become outdated, while fuel quality and measurement management and speculation control are not strict enough; lastly, the mechanism for coordination in price management has not been effective.
The Ministry of Industry and Trade (MoIT) has proposed that the prescribed fuel trading cost be raised to VND860 (US$0.04) per liter from the current VND600 (US$0.02) per liter, taking into account exchange rate fluctuations, current business expenses and transport costs. This would protect fuel companies against losses, and will prevent them from breaching the law.
The State Audit of Vietnam (SAV) also proposed this in its financial audit report of the Vietnam National Petroleum Group. In its report, SAV explained that every trader imports different volumes of fuels at different times and at different prices, resulting in variances in the average cost of fuel products among wholesalers, which would be different from the base prices set under the current regulations.
In Vietnam, the state stabilizes fuel prices through tax policies and the price stabilization fund. The Ministry of Finance (MoF) and the MoIT take charge of supervision, post-inspection and violations. Vietnam has adjusted retail fuel prices 12 times since the beginning of the year, including six increases and six decreases. (November 15, 2012)