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| A petrol station in Hanoi__Photo: VNA |
The Ministry of Industry and Trade has proposed a mechanism to allow advances from the State budget to the fuel price stabilisation fund, aiming to cushion volatility in domestic fuel prices, according to a draft decree.
The move follows a government resolution issued on March 27 approving advances from the surplus of the State budget in 2025 to the fuel price stabilisation fund.
The draft decree emphasises transparency and accountability in the use, contribution and reimbursement of the fuel price stabilisation fund.
Under the draft, the Ministry of Industry and Trade’s Domestic Markets Department would be in charge of overseeing usage and providing advances to fuel wholesalers to support price management.
For the first disbursement, traders would request advances based on projected consumption over seven days. The advances would be calculated at fixed rates of VND 5,000 per litre for diesel and VND 4,000 per litre for other fuels.
The advances would then be transferred into escrow accounts held by designated firms.
In subsequent pricing cycles, traders must report on the use of the advances, balances and additional funding needs ahead of each adjustment period for review and approval of any further disbursements.
If the advance proves insufficient for a seven-day cycle, the Domestic Markets Department would propose that the Ministry of Industry and Trade coordinate with the Ministry of Finance to seek additional budget allocations.
The fund must be used to supply each litre and kilogramme of fuel only once at the wholesale level. Traders would be required to open accounts dedicated solely for fund-related transactions.
After each pricing cycle, firms would calculate actual spending based on real consumption and withdraw corresponding amounts from the escrow accounts. Any interest accrued would be added back to the fund.
Within five days of each adjustment, traders must also transfer contributions into the fund based on actual sales volumes.
Regarding repayment, once the fund reaches at least VND 8 trillion, the ministry would require independent audits to determine total spending and contributions, which would serve as the base to calculate the amount to be returned to the State budget.
Prime Minister Pham Minh Chinh on March 27 signed a decision to allocate VND 8 trillion from surplus 2025 budget revenues to the fuel price stabilisation fund.
The move comes as ongoing tensions in the Middle East have driven volatility in global energy markets, affecting domestic fuel prices.
Since late February, Vietnam has adjusted retail fuel prices 11 times. RON 95 gasoline currently sells at around VND 24,330 per litre, while diesel is at VND 35,440.
Authorities have tapped the fuel price stabilisation fund nine times, disbursing nearly VND 5.3 trillion, leaving a balance of roughly VND 320 billion.
The Government has also cut environmental, value-added and special consumption taxes on gasoline to cushion the increases.- (VNS/VLLF)
