Regulating petrol prices to ensure publicity and transparency

The prices of oil and gasoline have been adjusted 2 times since the beginning of the year 2018. Picture: ST.

The price of gasoline is based on the market prices

Since January 1, 2018, in order to carry out the transfer and replacement of biofuels for traditional fuels, gasoline RON 92 has been completely replaced by E5 RON92 bio-fuel. Currently, there are only two types of gasoline on the market: RON 95 and E5 RON 92. The goal of this change is to reduce the dependence on petroleum, improve the environment and perform well the commitments of the Government of Vietnam with the international regulations on reduction of greenhouse gas emissions. The Inter-Ministerial of Industry and Trade - Finance has calculated and announced the base price for gasoline E5 RON92; It also monitors the adjustment of RON95 prices of the focal enterprises.

However, over the first two operating seasons of 2018, the difference between the price of RON 95 gasoline and E5 RON92 fluctuates in the range from VND 1.710 / liter to VND 1850/ liter. Meanwhile, the base prices for Ron 95 has not been announced, causing mixed public opinions.

Explaining the issue, Mr. Nguyen Anh Tuan, Director of the Department of Price Management, member of the Inter-Ministerial of Finance and Industry and Trade Steering Committee, said that the domestic petrol price is being regulated. According to the Decree No. 83/2014/ ND-CP dated September 3, 2014 of the Government on petrol and oil trading with principle of basic price: “the petrol and oil price is based on the market mechanism, regulated by the State”. The petrol price is regulated in line with the trend of world’s petrol and oil price. At the same time, the administration of the import tax on petrol and oil in the formula of base price calculation will be applied. The price stabilization fund will be used only for ensuring the principle of operating in a market mechanism under State management for contributing to support production and businesses, and the lives of people. Under the current regulations, the Inter-Ministerial of Finance - Industry and Trade announces the basic price of fuel commodities as a basis for adjusting petrol and oil prices in the country. The adjustment must be ensured on the principle of openness and transparency.

"About the price difference between the two types of gasoline, the main reason is the price of E5 RON92 gasoline is being spent on the price stabilization fund at VND 857 / liter (since January 4, 2018). While RON95 gasoline is regulating under the market, it does not use the Price Stabilization Fund and is being adjusted by world prices. At the same time, the monitoring of gasoline prices in the first half of January 1/2018 shows that the price of RON95 gasoline (level III to V) of some countries in the region is higher than the price of RON95 gasoline of Vietnam from 3,000 to 5,000 VND/ such as Thailand, India, Cambodia, Philippines”, said Nguyen Anh Tuan.

According to the representative of the Ministry of Finance, through statistics, the E5 RON92 consumption accounts for about 60% of total gasoline consumption, contributing to create a clean environment and create stable output for agricultural products. Currently, the Ministry of Industry and Trade continues to monitor the demand and supply of RON95 gasoline according to E5 RON92 emission standards, and announces the basic price in line with the domestic market situation of trading petroleum products.

Managing prices on the principle of harmony

Previously, on the basis of the proposal of the Ministry of Industry and Trade in the document No. 199/ BCT-TTTN dated January 9, 2018, on the announcement of the petrol base price and opinions of the Department of Price Management (the Ministry of Finance), Deputy Prime Minister Vuong Dinh Hue proposed the announcement of the base price of petroleum products in accordance with the Government's Decree No. 83/2014/ ND-CP on petrol and oil trading and other related guiding documents. The Ministry of Industry and Trade will chair and coordinate with the Ministry of Finance and concerned agencies to continue to monitor the consumption of E5RON92 and RON 95 gasoline in Euro 1 and Euro 4 standards in the first quarter of 2018 to announce the basic price of petroleum commodities that is suitable to the market and in accordance with the law.

Deputy Prime Minister Vuong Dinh Hue asked the Ministry of Finance and the Ministry of Industry and Trade to continue regulating gasoline prices of E5RON92, RON 95 and other petroleum products on the principle of harmonization, synchronicity, flexibility to use the petrol and oil price stabilization fund in order to control petrol and oil price.

The Inter – ministerial of Finance and the Ministry of Industry and Trade chairs and collaborates with related units to promote information and propaganda about the benefits of E5 RON 92 gasoline for consumers to build trust; enhancing quality control, avoiding fraud in petrol enterprises; at the same time, to manage distribution well and plan to ensure the sources of fuels for bio-fuel.