Necessary and suitable for market mechanism!

Amidst various opinions surrounding the provision allowing businesses to independently calculate, publish, and determine retail gasoline and diesel prices in the draft amendment to the Decree on gasoline and diesel business recently submitted by the Ministry of Industry and Trade to the Ministry of Justice , economist Dr. Le Dang Doanh – former Director of the Central Institute for Economic Management Research (Ministry of Planning and Investment) – told reporters from the Industry and Trade Newspaper that allowing businesses to independently calculate and determine retail prices based on fixed costs already published by the state is necessary and consistent with the current market mechanism.

"Because Vietnam has now integrated very deeply into the global economy , and its export and import turnover are both higher than its GDP, it is necessary to allow businesses to be autonomous and determine their own selling prices," affirmed Dr. Le Dang Doanh.

Businesses may be allowed to determine the selling price of gasoline and diesel fuel themselves (Photo: Thanh Tuan)

However, according to Dr. Le Dang Doanh, for the Decree on petroleum business to truly be implemented and create sustainability and stability for petroleum business operations, the Ministry of Industry and Trade needs to continue seeking input from economic experts, especially the business community and business associations, on this matter. Because petroleum is an essential commodity and plays a crucial role in the lives and production and business activities of enterprises, allowing businesses to independently calculate and announce retail prices raises concerns that it will give a significant advantage to key distributors, while the rights of all stages in the petroleum supply chain are not clearly defined.

"Careful consideration and calculation are needed to avoid monopolies, while balancing the interests of petroleum businesses in the supply chain, as well as the interests of petroleum businesses and businesses that use petroleum," Dr. Le Dang Doanh expressed.

Regarding the Fuel Price Stabilization Fund as proposed in the Draft Decree, the Ministry of Industry and Trade has not included regulations for managing the Fuel Price Stabilization Fund as in previous drafts.

According to the proposal, instead of keeping the balance of the Fuel Price Stabilization Fund at the leading enterprises as it is currently, it will be considered for transfer to the state budget, and the allocation and expenditure of this Fund will be carried out in accordance with the 2023 Price Law. At the same time, the Stabilization Fund will not be used regularly; instead, when fuel prices fluctuate unusually, the Ministry of Industry and Trade will take the lead in coordinating with other ministries and agencies to develop stabilization measures, which will be submitted to the Ministry of Finance for compilation and presentation to the Government for consideration and decision on the policy to be implemented.

The draft also proposes that the Ministry of Finance will instruct key petroleum traders to transfer and deposit the remaining balance of the price stabilization fund into the state budget.

Regarding this proposal, some opinions suggest that consolidating the Fuel Price Stabilization Fund under a single authority would facilitate centralized management and clarify accountability in case of misappropriation. However, even with the state management agency controlling the Fuel Price Stabilization Fund, a supervisory mechanism is still needed to ensure transparency, openness, and prevent misappropriation of public funds.

Regarding this issue, according to the Ministry of Public Security, in the past, the state management and use of the Fuel Price Stabilization Fund have had many loopholes and shortcomings, allowing some fuel wholesalers to misappropriate and misuse the fund; some functional agencies and public opinion among fuel businesses have conflicting views on the necessity of maintaining the Fuel Price Stabilization Fund.

Therefore, the Ministry of Public Security proposes that the Ministry of Industry and Trade, in coordination with the Ministry of Finance, carefully assess the role and effectiveness of the Price Stabilization Fund in achieving the goal of stabilizing domestic gasoline and diesel prices in the face of sudden price fluctuations in the global oil market; and the conformity of regulations on the Price Stabilization Fund with legal provisions. If the Price Stabilization Fund is to be maintained, the Ministry of Industry and Trade proposes studying amendments and additions to the Draft Decree to strictly regulate the establishment, use, and management of the Price Stabilization Fund.

In line with this view, some opinions also suggested clarifying the position, functions, tasks, powers, and operating mechanisms of the Fund; clearly defining the state management functions of the Fuel Price Stabilization Fund in accordance with the functions, tasks, and powers of the ministries and sectors, for submission to the Government for consideration and decision.

According to Dr. Le Dang Doanh, this is a complex issue. To manage the fund effectively, the Ministry of Finance needs to establish a council with the participation of key enterprises and relevant agencies to decide on the level of expenditure and allocation during periods of strong global price fluctuations. The Price Stabilization Fund needs to be used effectively, in accordance with its name of stabilizing the market.

According to the latest figures released by the Ministry of Finance, the balance of the Fuel Price Stabilization Fund is currently nearly 6,700 billion VND. In the price adjustment periods from the beginning of 2024 to the present, the inter-ministerial committee of Finance and Industry and Trade has not used the fund, although in some periods, contributions were made to the fund for certain petroleum products.

The Fuel Price Stabilization Fund is being established and used according to the guidelines in Circular 103/2021. Accordingly, this fund can only be used when the difference between the base price of the current price and the base price of the previous price increases by 7% or more. When the price decreases by more than 5%, additional funds are allocated, beyond the stipulated 300 VND/liter.

Source: https://congthuong.vn/de-doanh-nghiep-tu-tinh-toan-va-cong-bo-gia-ban-xang-dau-can-thiet-va-phu-hop-co-che-thi-truong-333796.html