The Government amends and supplements regulations on price formula and time for managing gasoline prices.
Shorten the time of operating gasoline prices
Decree No. 80/2023/ND-CP amends and supplements Point 3, Clause 27, Article 1 of Decree No. 95/2021/ND-CP on the time of managing gasoline prices.
Accordingly, Decree 80/2023/ND-CP shortens the time for managing gasoline prices from 10 days to 7 days. Specifically, instead of managing gasoline prices on the 1st, 11th and 21st of each month, according to the new regulations, the time for managing gasoline prices is carried out on Thursdays of each week.
In case the price management period coincides with the Lunar New Year holiday, it will be implemented as follows: If Thursday falls on the last day of the Lunar New Year (29th or 30th of Lunar New Year), the petrol price management will be implemented on the preceding Wednesday. If Thursday falls on the 1st, 2nd or 3rd day of Lunar New Year, the petrol price management period will be implemented on the 4th day of Lunar New Year.
In case the price management period coincides with a holiday according to regulations, it will be implemented as follows: If Thursday coincides with the first day of the holiday, the petrol price management period will be implemented on the preceding Wednesday. If Thursday coincides with the remaining holidays, the petrol price management period will be implemented on the first working day after the holiday.
In case the price of petroleum products fluctuates abnormally, affecting socio-economic development and people's lives, the Ministry of Industry and Trade is responsible for reporting to the Prime Minister for consideration and decision on the appropriate time to manage petroleum prices.
Change the base price formula
Decree No. 80/2023/ND-CP amends and supplements Clause 28, Article 1 of Decree No. 95/2021/ND-CP on the base price formula. Accordingly:
1- The base price of gasoline and oil is determined by (=) the price of gasoline and oil from imported sources multiplied by (x) the proportion (%) of gasoline and oil output from imported sources plus (+) the price of gasoline and oil from domestically produced sources multiplied by (x) the proportion (%) of gasoline and oil output from domestically produced sources, in which:
a) The factors forming the base price, including tax expenses to calculate the base price of gasoline and oil as prescribed in this Decree, are only applied to calculate the base price of gasoline and oil.
b) The proportion (%) of petroleum output from domestic production and import sources to calculate the base price is determined quarterly; the proportion of output from the previous quarter is applied to calculate the base price for the base price management periods of the following quarter.
Quarterly, based on data provided on imported petroleum output by the Ministry of Finance and reports on domestic petroleum sales output of petroleum producers (from the 21st of the month preceding the first month of the quarter to the 20th of the last month of the quarter), the agency in charge of regulating petroleum prices calculates and determines the proportion (%) of petroleum output from domestic and imported sources to calculate the base price.
c) The price of imported gasoline is determined by (=) world gasoline price plus (+) cost of transporting gasoline from foreign countries to Vietnamese ports plus (+) standard business costs plus (+) the amount of deduction for the Price Stabilization Fund plus (+) standard profit plus (+) tax costs (import tax, special consumption tax (if any), environmental protection tax (if any), value added tax) plus (+) fees and other deductions according to current law. In which:
- World petroleum prices are determined by the Ministry of Industry and Trade based on the principle of calculating the average number of days with prices between two periods of announcing the base price of petroleum products traded on the international market.
- The cost of bringing petroleum from abroad to Vietnamese ports (including plus (+) or minus (-) premium as a price adjustment factor in petroleum import contracts, insurance costs, transportation costs and other arising costs (if any), is determined by the Ministry of Finance according to the weighted average method according to the imported petroleum output and notified to the Ministry of Industry and Trade for application in the basic price formula. The Ministry of Finance reviews and adjusts the cost of bringing petroleum from abroad to Vietnamese ports periodically every 3 months. In case during the implementation month, due to objective factors, the actual reasonable and valid cost of bringing petroleum from abroad to Vietnamese ports fluctuates with an amplitude of over 100%, affecting the production and business activities of enterprises; on the basis of the report on actual costs incurred at the main petroleum traders, the Ministry of Finance shall preside over and coordinate with the Ministry of Industry and Trade to report to the Prime Minister to decide to adjust the review time and announce the costs accordingly.
The cost of import tax on gasoline and oil is determined based on the weighted average import tax rate multiplied by (x) (world oil price plus (+) the cost of transporting gasoline and oil from abroad to Vietnamese ports) multiplied by (x) the foreign exchange rate. In which, the weighted average import tax rate is determined quarterly based on the volume of imported gasoline and oil (during the period from the 21st day of the month preceding the first month of the quarter to the 20th day of the last month of the quarter) and the weighted average import tax rate (%) of the previous quarter is the basis for calculating the base price of the following quarter. The foreign exchange rate is implemented according to the provisions of Clause 9, Article 1 of Decree No. 59/2018/ND-CP dated April 20, 2018 and amendments, supplements and replacements (if any).
The weighted average import tax rate (%) is determined and announced by the Ministry of Finance for the Ministry of Industry and Trade to apply to calculate import tax costs in the formula for calculating gasoline prices from imported sources.
- Special consumption tax costs (if any) are determined based on the special consumption tax calculation price multiplied (x) by the special consumption tax rate, in which the special consumption tax calculation price is determined based on the factors forming the base price as instructed by the Ministry of Finance for the Ministry of Industry and Trade to calculate and apply in the base price calculation formula. Special consumption tax rates are implemented according to the provisions of current special consumption tax laws.
Expenses for environmental protection tax (if any), value added tax, fees and other deductions are made in accordance with current laws.
- Standard business costs and standard profits are determined and announced annually by the Ministry of Finance for the Ministry of Industry and Trade to apply in the formula for calculating the basic price of gasoline.
- The level of provision for the Price Stabilization Fund is implemented according to the announcement of the Ministry of Industry and Trade at the time of announcement of the base price.
d) Price of gasoline from domestic production sources
The price of gasoline from domestic production sources includes the following factors and is determined by (=) world gasoline price plus (+) or minus (-) premium (if any) plus (+) the cost of transporting gasoline from domestic refineries to ports (if any) plus (+) the standard business cost plus (+) the amount of the Price Stabilization Fund deduction plus (+) the standard profit plus (+) the expenses for taxes, fees and other deductions according to current law provisions. In which:
- Premium for calculating the price of gasoline from domestic production sources (if any) is a price adjustment factor in the gasoline purchase and sale contract between the gasoline wholesaler and the gasoline wholesaler or the enterprise authorized to purchase all gasoline products of the refinery; determined by the weighted average method according to output. Premium included in calculating the price of gasoline from domestic production sources must not be higher than the average world price multiplied by (x) the lowest special preferential import tax rate for gasoline products according to international commitments (in case the lowest special preferential import tax rate for gasoline is greater than 0%).
Premium and cost of transporting petroleum from domestic refineries to ports (if any) are determined by the Ministry of Finance using the weighted average method based on the petroleum output from domestic refineries to ports to be applied in the base price formula.
The Ministry of Finance shall review and adjust the Premium level and the cost of transporting petroleum from domestic refineries to ports (if any) periodically every 3 months; in case during the implementation month, due to objective factors, the actual reasonable and valid costs fluctuate with an amplitude of over 100%, affecting the production and business activities of the enterprise; based on the report on the Premium amounts and the actual costs of transporting petroleum from domestic refineries to ports arising at the main petroleum traders, the Ministry of Finance shall preside over and coordinate with the Ministry of Industry and Trade to report to the Prime Minister to decide to adjust the review time and announce the costs accordingly.
Taxes, fees and other deductions are made in accordance with current laws.
- Price forming factors include world oil and gas prices, special consumption tax costs (if any), standard business costs, standard profits, and the level of provision for the Price Stabilization Fund implemented according to the provisions in point c, point 1 above.
2. The base price of bio-fuel is determined by (=) the percentage of unleaded gasoline volume (%) multiplied by (x) {(world gasoline price plus (+) the cost of transporting gasoline from abroad to Vietnam ports plus (+) the cost of gasoline import tax) multiplied by (x) the proportion of imported gasoline output plus (+) (world gasoline price plus (+) premium plus (+) the cost of transporting gasoline from domestic refineries to ports (if any)) multiplied by (x) the proportion of gasoline output from domestic production sources)} plus (+) the percentage of fuel Ethanol volume (%) multiplied by (x) fuel Ethanol price plus (+) the standard business cost plus (+) the amount of the Price Stabilization Fund deduction plus (+) the standard profit plus (+) the expenses for taxes, fees and other payments according to current law provisions, in which:
- The percentage by volume of unleaded gasoline and the percentage by volume of fuel Ethanol applied to calculate the base price of bio-fuel as prescribed in this Decree are the highest permitted blending ratios as prescribed by competent authorities in accordance with each type of bio-fuel; the actual blending ratio is within the permitted limits of competent authorities.
- The fuel Ethanol price applied in the formula for calculating the base price of bio-fuel is determined by the Ministry of Finance and notified to the Ministry of Industry and Trade for application in the formula for calculating the base price.
- Factors forming the price include: World gasoline price, cost of bringing gasoline from abroad to Vietnamese ports, premium to calculate gasoline price from domestic production sources, cost of bringing gasoline from domestic refineries to ports (if any), cost of gasoline import tax, cost of special consumption tax, standard business costs, level of deduction for Price Stabilization Fund, standard profit implemented according to the provisions in point c, point 1 above.
It is necessary to amend the regulations on the basic price formula of petroleum products.
* Currently, gasoline prices are being managed in the direction of the State regulating a complete base price formula. This base price will be the basis for state agencies to regulate domestic gasoline retail prices. Regulating the base price according to a fixed formula with costs calculated based on the average cost reported by businesses according to the guidance of the Ministry of Finance will never accurately reflect the costs of each key gasoline business enterprise.
Recently, the petroleum market has had many fluctuations, one of the reasons is that the costs of petroleum business have not been calculated correctly and fully in the basic petroleum price structure managed by the State, leading to petroleum businesses suffering losses and having no motivation to maintain business activities.
To overcome the above situation, the Government has revised and supplemented regulations on the basic price formula for petroleum products.
Source: baochinhphu
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