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| A customer at a petrol station in Hanoi__Photo: VNA |
Instead of regulating selling prices of fuels in the domestic market as at present, the State will allow fuel traders and distributors to set retail prices by their own based on price elements announced by the State.
This is proposed by the Ministry of Industry and Trade (MOIT) in the third draft of the decree on petrol and oil trading recently released.
Under the draft, regulatory bodies would disclose the average global petrol and oil prices once every seven days, along with some fixed costs such as foreign exchange rate, excise tax, value-added tax, and import duty. Traders and distributors would base themselves on these data as well as their business expenses and profit margins to determine the maximum selling price. The retail price must not exceed such maximum selling price. Exceptions are remote areas and offshore islands where a 2-percent surcharge might be added to the retail price. Noteworthily, enterprises would have to declare and notify prices to regulatory bodies for supervision.
Regarding management of the gasoline distribution system, the MOIT sets out two options.
As per the first option, petroleum distributors may not sell/purchase petrol and oil to/from one another. They may only purchase these products from wholesale traders. Under the second option, purchase and sale of petrol and oil among distributors are not prohibited. For the time being, the MOIT supports the first option, saying that it would help control the supply of fuels.
Particularly for wholesale traders, the draft permits them to lease storage facilities provided that they meet law-prescribed standards and criteria. However, they would be required to connect data on input, output and inventory of petrol and oil. Besides, distributors that wish to be licensed to act as wholesale traders must meet certain conditions, e.g., having continuously operated for at least 36 months and ensuring a total supply of at least 100,000m3 of petrol and oil per year from the sources of imported gasoline, petrol and oil purchased from domestic refineries, and petrol and oil blended by themselves.-
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