Ministry of Finance: find solutions to stabilize supply to reduce petrol and oil prices

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Minister Ho Duc Phoc at the questioning session on financial issues on June 8. Photo: Quochoi.vn.

Stabilize supply and demand to reduce petrol and oil prices

At the question- and-answer session on the morning of June 8, Deputy Nguyen Thi Viet Nga, Hai Duong National Assembly Deputies expressed her concern about the complicated developments of petrol and oil prices on the world market. She asked Minister Ho Duc Phoc to clarify the views of the Ministry of Finance on proposals on reducing taxes on petrol and oil to support people and businesses.

In response to this issue, the Head of Ministry of Finance said, although the domestic petrol and oil prices are at high level, this level is lower than that in neighboring countries around Vietnam, the petrol and oil prices in Laos are VND10,000-11,000 per liter higher than those in Vietnam; and the petrol and oil prices in Cambodia are VND2,000-3,000 per litter higher than those in Vietnam.

Facing an increase in petrol and oil prices in Vietnam, the tax reduction on petrol and oil depends on the authority of the National Assembly and the National Assembly Standing Committee. The National Assembly Standing Committee has cut the green tax by 50% to reduce the petrol and oil prices. This reduces State revenue by VND24,000 billion.

The petrol and oil currently subject to import tax, excise tax and value added tax. The reduction on excise tax is decided by the National Assembly. This will be reported to the National Assembly for consideration, said the Minister of Finance.

According to the Minister, to stabilize petrol and oil prices, as well as tax reduction measures, it is necessary to take comprehensive solutions because if tax cuts to reduce petrol and oil prices, it will lead to petrol and oil smuggling to neighboring countries, allowing money to flow into foreign countries.

On the other hand, the petrol and oil prices depend not only on taxes but also on supply and demand relationships. Accordingly, the Ministry of Finance will work with the Ministry of Industry and Trade to find other petroleum sources and not just depend on imports from Singapore. as at present.

In addition, it is also necessary to boost domestic petroleum production because currently Vietnam’s demand is about 21 million tons per year, while the domestic production is only 11 million tons per year. The capacity of Nghi Son Refinery and Petrol Chemical LLC is still low and should be improved in the near future.

Also at the question-and-answer session, regarding the opinion "we should not interfere too much with the prices of petroleum products, but let the prices increase-decrease in a natural way according to the world" of Deputy Nguyen Van Than, from Thai Binh National Assembly Deputies, Minister Ho Duc Phoc said that the prices of petroleum products must be stabilized and controlled by the State, so the State must sometime must intervene to reduce the prices. The reduction of gasoline prices brings many benefits, such as: reducing production costs, promoting growth, promoting competitiveness, solving problems of labor and thereby accumulating for the economy. Since then, the Ministry of Finance will collect taxes through increasing the added value of the economy, corporate income and other items. However, it is necessary to assess the impact from the reduction of gasoline prices.

Many solutions to fight inflation

At the question-and-answer session, Deputy Hoang Van Cuong from the Hanoi National Assembly delegation said that currently, in the world, inflation is increasing rapidly. Meanwhile, as the country imports many items, the prices of gasoline also soar, which easily leads to import inflation. In particular, the disbursement of the support package will also put pressure on inflation. He wishes to listen solutions offered by the Ministry of Finance to curb inflation.

In response to the opinion of Deputy Hoang Van Cuong, the Minister of Finance said a very "hot" issue in the current period is inflation control. Currently, inflation in the US is at 8.3%, inflation in Europe is at 8%, Singapore is 5.4%, South Korea is 4.8% and Thailand is also 4.6%. Meanwhile, this rate in our country is 2.25% (the target set by the National Assembly for the whole year 2022 is 4%).

In the context that Vietnam is integrating deeply into the world economy, this causes the price of foreign raw materials to increase, the domestic price also increases, such as gasoline, fertilizer, steel. But fortunately, our country is self-sufficient in food and food products, account for 40% of the total volume of goods. The Minister said that this is the golden time for the country to make a breakthrough in the development of domestic production and consumption.

"If we take advantage of this opportunity to create and develop, we will definitely bounce back because the inflation pressure in other countries is very high now," said the minister.

Discussing solutions, the Minister said that it is necessary to continue to proactively and flexibly implement monetary policies in close coordination with fiscal policies and other macroeconomic policies to control inflation as target set out.

Furthermore, according to the Minister of Finance, another solution is to promote enterprises, business households and ensure social security, restructure the economy and make breakthroughs in the economy, infrastructure and digital transformation.

"The core of the economy is not only fiscal and monetary policies, but those policies must be aimed at businesses and people. People and businesses do business effectively and earn money, GDP will rise, thereby increasing budget payment, creating jobs and making life better. Thus, administrative procedures, infrastructure, digital transformation, scientific and technical advances and all other conditions to help businesses and people perform well must be the most fundamental solution to fight inflation in the best way," said Minister Ho Duc Phoc.

Shares fluctuating as oil prices VCN- Oil prices have been fluctuating since the beginning of the year that led to the decline ...

Moreover, it is also necessary to continue controlling core inflation in 2022 to create a basis for general inflation control; continue to closely monitor the world economic situation and inflation, price movements of fuels and strategic material to step up the work of synthesis, analysis, forecast and development of scenarios and plans for each item to manage domestic production, balance and control supply and demand, and stabilize prices appropriately.