Ministries to extend interval between fuel price changes
The Ministry of Finance has proposed the Prime Minister extend the interval between the adjustments of fuel prices from the current ten days to 15 days, according to the Ministry of Industry and Trade.
The industry ministry last Tuesday submitted to the Prime Minister suggestions for amendment to Decree 84 in order to make the pricing regulations more appropriate with the reality. The industry ministry had collected three solutions from the finance ministry to price adjustment intervals.
At the moment, increasing or reducing prices for two consecutive times needs a minimum interval of ten days. The finance ministry said this interval will help align the local fuel prices with global prices, as any fall in global prices will soon translate into lower local retail prices and vice versa.
However, this method will easily cause public outcries as price hikes may be more frequent.
The second solution is to fix a 30-day schedule to change fuel prices which is consistent with the fuel reserves required to be sufficient for 30-day consumption. This means that the base price calculation is based on the 30-day cycle, but under such a circumstance, local prices will hardly be in line with global prices in a timely manner.
To harmonize fuel storage and to make intervals between price adjustments suitable, the finance ministry suggested setting the average price adjustment period at 15 days. The schedule is considered appropriate with international markets’ moves whilst ensuring local price stability.
The industry ministry also repeated the proposal that the finance ministry need to issue specific regulations on maximum commission amounts for agents, saying such information is not provided for in the prevailing law. Decree 84 just fixes the profit level and business cost at VND600 and VND400 a liter respectively from 2009.
The industry ministry last Tuesday submitted to the Prime Minister suggestions for amendment to Decree 84 in order to make the pricing regulations more appropriate with the reality. The industry ministry had collected three solutions from the finance ministry to price adjustment intervals.
At the moment, increasing or reducing prices for two consecutive times needs a minimum interval of ten days. The finance ministry said this interval will help align the local fuel prices with global prices, as any fall in global prices will soon translate into lower local retail prices and vice versa.
However, this method will easily cause public outcries as price hikes may be more frequent.
The second solution is to fix a 30-day schedule to change fuel prices which is consistent with the fuel reserves required to be sufficient for 30-day consumption. This means that the base price calculation is based on the 30-day cycle, but under such a circumstance, local prices will hardly be in line with global prices in a timely manner.
To harmonize fuel storage and to make intervals between price adjustments suitable, the finance ministry suggested setting the average price adjustment period at 15 days. The schedule is considered appropriate with international markets’ moves whilst ensuring local price stability.
The industry ministry also repeated the proposal that the finance ministry need to issue specific regulations on maximum commission amounts for agents, saying such information is not provided for in the prevailing law. Decree 84 just fixes the profit level and business cost at VND600 and VND400 a liter respectively from 2009.
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