The Ministry of Industry and Trade and the Ministry of Finance issued in late October a joint circular detailing the method of calculating a base fuel price and mechanisms for establishing, managing and using the fuel price valorization fund.
Under Joint Circular No. 39/2014/TTLT-BCT-BTC, enterprises may adjust the fuel trading cost from VND 860 per liter of petrol, VND 860 per liter of diesel or kerosene and VND 500 per liter of fuel oil to VND 1,050, VND 950 and VND 600, respectively.
Fuel prices reduced on November 7, 2014__Photo: Internet
Wholesale enterprises are allowed to administer the fuel price valorization fund, but they have to make regular contributions to the fund at VND 300 per liter. Profits generated from the fund’s bank deposits will be added to the fund. The Ministry of Industry and Trade will, instead of the Ministry of Finance, administer fuel prices.
The Circular also details some provisions related to price adjustment. Accordingly, if the base price rises by up to 3 percent but such rise impacts the socio-economic situation and consumers, the two ministries would consider using the fund to valorize the price. If the base price is upped from over 3 to 4 percent, wholesale traders could increase the selling price by no more than 3 percent and use the price valorization fund for the difference. In case the base price rises from over 4 to 7 percent, they may increase the selling price by 3 percent at most, plus 50 percent of the price difference; the other half will be covered by the fund.
Moreover, the base price will be now adjusted to better match the global average fuel price, as the price calculation period is reduced from 30 days to 15 days.
The Circular takes effect on November 1, 2014, and replaces the Minister of Finance’s Circular No. 234/2009/TT-BTC of December 9, 2009.-