On the rise: An attendant refuels a customer’s vehicle in Ho Chi Minh City. Petrol prices are forecast to continue to increase towards the end of the year due to moves by major world producers to tighten supply. — Bloomberg
HANOI: The appropriate use of the stabilisation fund is important to restrain increases in petroleum prices and reduce their effects on the country’s socio-economic development, according to the Industry and Trade Ministry.
From the beginning of this year, petrol prices have been raised 16 times with a total increase of 3,500 dong per litre.
The latest increase was on Sept 21, which brought the petrol price to nearly 26,000 dong per litre.
Petrol prices are forecast to continue to increase towards the end of the year due to moves by major world producers to tighten supply.
According to the Mercantile Exchange of Vietnam (MXV), Russia, the world’s third-largest oil producer with a market share of 13% globally, after the United States’ 16% and Saudi Arabia’s 13.5%, has put a squeeze on the oil market with a diesel export ban, threatening to aggravate a global shortage.
Countries that imported fuel from Russia have been forced to look for supplies from other markets, and oil refineries around the world need to increase capacity to meet demand.
Pham Quang Anh, director of MXV’s Information Centre, said the move to tighten oil exports would increase petroleum prices in the last four months of this year.
Brent oil prices are forecast to increase US$90 to US$95 per barrel, while the price range of US$100 per barrel would largely depend on the economic situation, especially the growth of the United States and Chinese economies.
The continued increase in fuel prices might heavily weigh on the consumer price index, Anh said, adding that it was important to seek measures to stabilise petroleum prices.
The ministry said domestic petroleum prices had increased continuously due to fluctuations in the global oil market and the world economy over concerns about moves to tighten supplies by major producers.
According to a joint decision of the ministry and the Finance Ministry, in the recent adjustments of petroleum prices on Sept 21, a total of 300 dong was used from the petrol price stabilisation fund each litre of petrol, diesel oil, and kerosene, a modest level compared with the fund’s balance of more than 7.4 trillion dong.
On the use of the stabilisation fund, the Industry and Trade Ministry said it was in accordance with a finance ministry circular, which states that it would be used when the increases in petrol prices are from 7%.
Seven recent increases in petrol prices were all below 7%, meaning that the fund had not been used in these adjustments, the ministry stated.
Expert Nguyen Tien Thoa said it was necessary to amend the regulations about the use of the petrol price stabilisation fund to ensure that it works to stabilise petrol prices.
Expert Vu Vinh Phu said that the existing taxes and fees on petrol remained at high levels, an important factor pushing up domestic retail petrol prices.
Reducing taxes and fees related to petrol imports could help lower petrol prices, Phu said.
Vietnam also needed to build a transparent oil and petrol market in line with regional and global markets, which would help better harmonise benefits between the state, enterprises, and residents, he stated.
The Industry and Trade Ministry of said that in order to restrain increases in petrol prices, the ministry had proposed solutions to the Prime Minister, including the efficient use of the stabilisation fund.
A representative from the Finance Ministry’s price management department said petrol was among essential goods and its price increase would significantly affect prices of other goods and services.
The Finance Ministry would enhance cooperation with other ministries, agencies, and localities to tighten price management, to prevent unreasonable increases in prices, and to strictly handle speculation. — Viet Nam News/ANN
