The domestic market price of petrol and gas is set to operate under market mechanisms from the fourth quarter of this year, according to Bui Ngoc Bao, chairman and CEO of the Vietnam National Petroleum Corporation (Petrolimex).
As part of Resolution 11, the Prime Minister had confirmed that the price of coal, petrol and oil would develop under market mechanisms, Bao confirmed.
"Seeing that petrol and oil are sensitive goods, both related to energy security, the Government has not yet opened the fuel market completely, remaining in control of the market in necessary cases," he said.
Bao added that the management of retail prices for petrol and oil on the domestic market fell under Decree 84, which has allowed petrol dealers to start earning profits from trading activities.
Nguyen Cam Tu, deputy minister of Industry and Trade, said that the Government had led the development of petrol and oil prices via market mechanisms and direct management.
Such form of management was aimed at ensuring the interests of the State in stabilising tax collection, of the people buying fuel at reasonable prices and of traders accumulating capital for investment development, he said.
Therefore, as part of Decree 84, if world oil prices were to increase or decrease by 0-7 percent, enterprises would be left to decide the retail price of petrol and oil on the domestic market. If world prices changed by 7-12 percent and beyond, the Government would co-operate with enterprises in setting suitable petrol and oil prices.
In some special cases, the Government would have the right to adjust fuel prices in order to stabilise the economy, Tu said.
On July 1, the Ministry of Finance decided not to raise import duties on petroleum products in the face of "complicated" fluctuations in the global market. The decision was expected to maintain the sales prices of petrol, diesel oil and kerosene.
During the last 30 days, although world oil prices fell, domestic prices remained unchanged, Tu said.
When world oil prices increased, the Government kept traders from raising local prices in order to compensate them for their losses from the State budget, he added. When world oil prices decreased, the Government increased import taxes in order to refund its budget, collecting money for the petrol price stabilisation fund.
According to Tu, if world oil prices continued declining, the Government would consider permitting dealers to cut retail prices.
Regarding calculation measures for local prices, Bao said that Petrolimex had the most transparent calculation methods for petrol and oil retail prices on the domestic market.
Bao said that, every year, Petrolimex invited independent auditing firms to audit its parent corporation and subsidiaries, adding that the auditing of petrol and oil prices was easy.
Domestic retail prices have been transparently calculated using data based on world prices, import tax rates and the rate of collecting money for the price stabilisation fund in a market report on the Petrolimex website. The current price for petrol is 21,300 VND (1.01 USD) and 21,000 VND for diesel oil./.