Officials and economists discussed possible adjustment to the petrol price stabilisation fund at the meeting held by the Vietnam Petroleum Association on May 17.
Public concern over fuel prices
Three plans were proposed to calculate retail prices include changing the retail prices in accordance with world prices, setting a retail price based on average world prices during a 30 days period or on an annual basis.
Economist Ngo Tri Long said price adjustments should be made within a 10 day period to match global prices. Long further said the national reserved petroleum is all stored at petrol companies and this situation makes it hard to separate national reserve with the private company stocks.
The second and third plans would let the state set the price cap for retail prices.
The second proposals would see the ministries of Finance and Industry and Trade announce the price cap for the whole month and in the third plan they will announce the price cap for the whole year. Enterprises could make their own adjustment to earn more profits.
However, Long said those plans would be ineffective as world petrol prices often changed unpredictably. To realise these plans, they would need a very capable team to react to sudden changes in world prices. The state would also have to calculate how to offset the differences between the world and domestic retail prices at such times.
Dr. Nguyen Minh Phong agreed and said aside from taxing VND300 per litre at the pump from customers, enterprises must also contribute to the fund. To calculate the retail prices, Phong proposed to include two types of fee in the prices. The first would be the enterprises' cost and profit and second is the required fees from the state.
"Through this, enterprises can manage their own losses and the state won't have to offset any losses for them. Actually, I still think we should scrap this stabilisation fund or change it into energy security fund." he said.
Vietnam Petroleum Association also favoured the first plan.