Although the world petrol prices have decreased, domestic companies are reluctant to make decreases.

Bad regulation blamed for consumer losses

In the last two weeks petrol prices in Singapore, the main supplier to Vietnam, were reduced to USD111-113 per barrel. With the current domestic retail prices, the wholesalers are able to make profits of VND900 (USD0.04) per litre .

Enterprises calculate their prices in accordance with Decree 84, stating that the time between consecutive petrol price adjustments now is 30 days. Many petrol firms have complained that this is the reason they are posting losses.

Some experts said if the Government amended the decree consumers could save VND500 per litre.

Pham Quoc Tuan from Vietnam Petrol Information wanted to change the price adjustment period to ten days because the decree was, according to him, hindering the market. If the decree were changed, the domestic prices could be quickly adjusted to the world prices, he said.

Tuan also said that the Government should change the working system of domestic petrol firms in order to improve transparency. Many enterprises have had continued complaints that the price of VND600 per litre is insufficient, and makes it difficult to calculate profits.

Economist Nguyen Minh Phong, also in favoured the change, adding that Decree 84 does not encourage competition.

Since Decree 84 was issued many, even some inside the Government, have criticised the regulation. Pointing out its weak points, there have been a large number of suggestions to amend the law; but this has yet to happen.