The ministries of Trade and Finance have no plan to cut pump prices of petroleum products in Vietnam for the time being although the world level is falling, local media said.
Under the common practice, the competent ministries need about a month to decide on the selling price of the distillated fuel when a new price trend on the world market appears.
Nguyen Tran Tien Thoa, vice director of Pricing Management Department under the Finance Ministry, said: the first thing the authorities will make now is considering raising import tax, which is now zero percent, to offset State subsidies on sales of this distillated fuel.
A reduction in retail price of petroleum products is only second to taxation adjustment, he said.
According to Trade Minister Truong Dinh Tuyen, the government has assigned the Ministry of Finance to devise a plan for pricing and taxation.
Tuyen said many supported the plan of raising import tax and reducing retail price at the same time.
However, oil traders said the Finance Ministry should not increase the import tax because the world oil price movement is very volatile.
Vietnam’s latest change in petroleum price took place in early August when the global crude oil price stood at above US$76 a barrel. Currently, the world oil price is hovering at US$70 a barrel.
Under the current mechanism, the government subsidizes sales of nearly all petroleum products, except for petrol. The State Budget is projected to spend VND12,900 billion (nearly US$810 million) this year to financially aid oil traders, including some VND6,800 billion in the first six months. This amount is equivalent to 1.4 per cent of Vietnam’s GDP this year, which is estimated at US$57 billion.
Labourer, Capital Security
Vietnamese
