The Ministry of Industry and Trade has issued a notable draft related to the Petroleum Price Stabilization Fund.

The Ministry of Industry and Trade has just completed the draft Decree on petroleum trading and sent it to the Ministry of Justice for review. In this third draft, the notable point is that the Ministry of Industry and Trade no longer regulates the Petroleum Price Stabilization Fund. The notable point in the draft is that the Ministry of Industry and Trade no longer regulates the Petroleum Price Stabilization Fund.

The draft only states the responsibility of the Ministry of Finance to guide key petroleum traders to transfer and pay the balance of the stabilization fund to the state budget.

With such a regulation, many people understand that the drafting agency is proposing to abolish the Petroleum Price Stabilization Fund. The current fund balance will be paid into the State budget.

However, speaking to Lao Dong, Ms. Nguyen Thuy Hien - Deputy Director of the Domestic Market Department ( Ministry of Industry and Trade ), said that the Petroleum Price Stabilization Fund still exists. According to the above draft Decree, the Petroleum Price Stabilization Fund is implemented according to the provisions of the 2023 Price Law.

The Price Law stipulates five price stabilization measures, of which the fifth measure is to use the Price Stabilization Fund for goods for which the fund has been established.

Ministries and branches develop price stabilization plans and send them to the Ministry of Finance for synthesis and submission to the Government for approval in principle. After the policy is approved, ministries and branches will organize implementation. This fund is not used regularly, and the stabilization measures are time-limited. The allocation or disbursement of this fund must comply with the Law on Prices.

Xuyen Viet Oil and Hai Ha Petro are two businesses that have violated the Petroleum Price Stabilization Fund in recent times. Photo: Nguyen Phong

Speaking to Lao Dong on July 14, economic expert Vu Vinh Phu - former Deputy Director of the Hanoi Department of Industry and Trade said that the regulation on the Petroleum Price Stabilization Fund as drafted is no different from abolishing the Stabilization Fund, the role of the fund is also blurred, no longer effective in stabilizing the market. Therefore, it is not necessary to maintain the Petroleum Price Stabilization Fund.

According to Mr. Vu Vinh Phu, during the implementation process, the Petroleum Price Stabilization Fund revealed more shortcomings than its effect on stabilizing the market. When world petroleum prices increased dramatically with a large amplitude, the fund became negative.

On the other hand, the Petroleum Price Stabilization Fund is located at the key petroleum trading enterprises, so at many times, the fund has been exploited by enterprises, used for the wrong purposes, and even violated the law.

The Fund also cross-subsidizes gasoline and oil at certain stages. That is unacceptable. A specific example of spending the Petroleum Price Stabilization Fund to cool down gasoline prices is that in the first quarter of 2024, there was a period when retail gasoline prices continuously increased, from below VND 22,000 to over VND 25,000/liter. At this time, the Petroleum Price Stabilization Fund was still very large, nearly VND 7,000 billion, but it was not used to stabilize prices and curb the increase in gasoline prices.

"From the above mentioned shortcomings in the establishment and use of the Petroleum Price Stabilization Fund - we see that it is time to abolish this fund. When abolishing the Petroleum Price Stabilization Fund (people's money), there must be a Stabilization Fund in kind (petrol) to replace it.

Therefore, the Stabilization Fund in kind must be large enough to reserve for the country for 3-6 months, only then will it be able to stabilize the market when necessary. This fund must be accounted for, circulated, bought low, sold high like a State capital management company," Mr. Phu affirmed.

Source: https://laodong.vn/kinh-doanh/bo-cong-thuong-dua-ra-du-thao-dang-chu-y-lien-quan-den-quy-binh-on-gia-xang-dau-1366161.ldo