Vietnam Floats Petroleum Prices from September 16

The Vietnamese government has decided to allow petroleum trading companies to define selling prices of petrol products from Sept 16 of this year, as a move to float the domestic petrol market in line with the world fluctuations, said Deputy Minister of Finance Tran Xuan Ha.

 

Enterprises will decide selling prices of petroleum based on import prices, tax, fees and estimated profits; and submit their decisions to the Ministries of Finance, Industry and Trade for consideration three days before announcing the new price, Ha elaborated.

 

Within the three-day period, if the ministries make no response, the proposed prices will be applied; however, if the ministries find any inappropriateness, they will disagree with the proposed prices by sending written documents to enterprises, he attributed.

 

The world petroleum price fell by between 5.7 per cent and 9.8 per cent in recent 12 days, which is considered a favorable condition for Vietnam to float its petrol price in line with the market mechanism, the official noted.

 

Vietnamese relevant agencies will issue guiding documents and punishment sanctions relating to the mechanism that took effect from Sept 16 in the near future, Ha said.

 

Regarding this issue, the Ministry of Finance decided to set up an inter-ministerial inspection group for petroleum products when handing over price defining authority to enterprises, a meeting on petrol price management mechanism Sept 16 in Hanoi was told.

 

The Vietnamese government will compensate for losses faced by petroleum traders from early 2007 to July 21 of 2008 because the volume of stocked petroleum that was imported with higher prices is considerable, Ha said.

 

Enterprises will return the government’s advance by extracting their pre-tax profits of petrol trading in the coming time, the official said, adding that losses of gasoline trading was estimated at VND3 trillion (US$181.81 million) and of diesel trading at VND14 trillion (US$848.48 million) in the first seven months of this year.

 

The government Sept 16 decided to cut retail selling price of diesel by VND450 or 2.82 per cent per liter to VND15,500 per liter in the wake of the global oil price fall. (Local sources)