The Ministry of Industry and Trade proposed that the Petroleum Price Stabilization Fund will not be left at the main trading enterprises as it is now, but will be held by the State.
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| The new draft Decree on petroleum business proposes that the Petroleum Price Stabilization Fund will be held by a State management agency. |
Proposal to transfer to state management agency
The draft Decree on new petroleum business is being consulted to replace the three current decrees on petroleum management, including: Decree 83/2014/ND-CP, Decree 95/2021/ND-CP and Decree 80/2023/ND-CP.
In the 3rd Draft recently sent to the Ministry of Justice for appraisal, the Ministry of Industry and Trade proposed that the Petroleum Price Stabilization Fund will not be held by the main trading enterprises as it is now, but will be held by the State. The use of this fund will be in accordance with the provisions of the 2023 Price Law.
Thus, compared to previous drafts, the Ministry of Industry and Trade's viewpoint on the Petroleum Price Stabilization Fund has a different point, which is to keep the fund, but instead of businesses keeping it, it will be transferred to the State for management. The Ministry of Finance will guide businesses to transfer and pay the balance of the Petroleum Price Stabilization Fund to the budget.
In case the market price of petroleum products fluctuates abnormally, or in case the competent authority declares a state of emergency, incident, disaster, natural disaster, epidemic..., the Ministry of Industry and Trade shall preside over and coordinate reporting to the Government for consideration and decision on applying price stabilization measures according to the provisions of the 2023 Price Law.
The Domestic Market Department (Ministry of Industry and Trade) explained: "The Petroleum Price Stabilization Fund still exists, but is implemented according to the provisions of the 2023 Price Law and is not used as frequently as it is now."
In fact, in this 3rd Draft, the drafting agency listened to comments from businesses and associations.
Previously, the Vietnam Petroleum Association (VINPA) proposed to abolish the Petroleum Price Stabilization Fund, because it believed that if the price adjustment cycle was implemented every 7 days, the price fluctuation between the two basic adjustments would not be large, and domestic prices would closely follow world price movements. Therefore, the impact of adjusting the selling price of petroleum would not be large.
If the Fund still exists, VINPA proposes to assign a state agency to directly manage this fund, specifying the deduction and disbursement of the fund to ensure timeliness, convenience and no impact on businesses, and at the same time supplementing the selling price of gasoline and oil, because there is no deduction and disbursement of the Gasoline Price Stabilization Fund in the base price.
VINPA believes that this method helps to overcome the shortcomings in the use of the Fund as in the past, while also making information about the Fund transparent.
Dr. Nguyen Duc Do, Deputy Director of the Institute of Economics and Finance (Academy of Finance), assessed that bringing the Petroleum Price Stabilization Fund under one authority will help centralize management and if there is any loss, the responsibility will be clarified. However, even though the State management agency holds the Petroleum Price Stabilization Fund, a monitoring mechanism is still needed to ensure transparency, publicity, and avoid loss and misappropriation of people's money.
Commenting on the Draft Decree on Petroleum Trading, the Ministry of Public Security said that the state management and use of the Petroleum Price Stabilization Fund still have many loopholes and inadequacies, allowing some key petroleum traders to misappropriate and misuse the fund; in addition, some authorities and public opinion of petroleum trading enterprises have opposing opinions on the necessity of maintaining this fund.
“The Ministry of Industry and Trade and the Ministry of Finance should carefully assess the role and effect of the Fund in achieving the goal of stabilizing domestic petroleum prices in the face of sudden fluctuations in the world petroleum market prices; the conformity of the Fund's regulations with the provisions of law. In case the Fund continues to be maintained, it is necessary to study amendments and supplements to the Draft Decree, strictly regulating the establishment, use and management of the Fund,” the Ministry of Public Security proposed.
Proposal to abolish the Petroleum Price Stabilization Fund
Abolishing the Petroleum Price Stabilization Fund has been a proposal made by many experts and businesses for many years, in all conferences giving comments on the Draft Decree on Petroleum Business. According to businesses, this fund does not help stabilize prices, so it should be abolished and managed by using tax, fee and reserve tools.
Although the Draft includes new content on the Petroleum Price Stabilization Fund, many businesses are still not satisfied. Large businesses such as the Vietnam National Petroleum Group (Petrolimex), Vietnam Oil Corporation (PVOIL), Thanh Le Import-Export Trading Corporation - JSC... all want to abandon this fund.
The Ministry of Industry and Trade also admitted that this fund has shown many shortcomings in the past. Therefore, the drafting agency will seek opinions to come up with a suitable mechanism, ensuring compliance with the Law on Prices and related legal regulations.
The Central Inspection Committee and the Government Inspectorate also said that the current allocation and use of the Petroleum Price Stabilization Fund is not in accordance with the provisions of the Law on Prices.
The conclusion of the Government Inspectorate announced at the end of 2023 showed that the Petroleum Price Stabilization Fund was continuously misappropriated and misused by key traders. 7/15 petroleum traders misused this fund, did not transfer money to the fund account, but left it in the enterprise's payment account, the amount of nearly 8,000 billion VND.
Not to mention, since the price management cycle was shortened to once every 7 days, the fluctuation between the two times is not large, and the Petroleum Price Stabilization Fund has not had to be used.
Data released by the Ministry of Finance shows that at the end of 2023, the balance of the Petroleum Price Stabilization Fund was about VND 6,655 billion, an increase of more than VND 2,000 billion compared to the end of 2022. During the management periods from the beginning of 2024 to present, the joint Ministry of Industry and Trade - Ministry of Finance has almost not used the fund...
Source: https://baodautu.vn/doanh-nghiep-se-khong-giu-quy-binh-on-gia-xang-dau-d220083.html
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