The Vietnamese Government is seeking measures to get rid of secretive oil price arrangements among a few oil traders, after they obtained autonomy rights to decide retail prices of petroleum products, an official from the Ministry of Trade said.
Trade Minister Truong Dinh Tuyen on April 9 said, “The State will still apply management measures to petroleum market.”
Oil traders, all State-run, have to make monthly reports on import volumes, prices, inventories and profits. From this data, relevant State agencies will make suitable adjustments.
Nguyen Tien Thoa, Director of Pricing Management Agency under the Ministry of Finance, said any activity of mercenary speculation or illegal price arrangement will be strictly prohibited.
Minister Tuyen believed the upcoming price-tax regulatory mechanism is a controlling tool for the Vietnamese fuel market.
He said oil traders can fix retail prices after Decree 55/2007/ND-CP takes effect, but preferably after April 21, and subsidies for sales of certain petroleum products will be put to an end from now until late 2008.
They must also store reserves that can feed the national demand for 20 consecutive days.
However, experts said the floating of petroleum markets should be allowed when there is a competitive market. In fact, there is no such a market in Vietnam at this moment.
All oil importers and distributors are state-run, no private firms are permitted to import distillated fuel to sell in the country, they added.
Vietnam now relies on petroleum imports, as it lacks refining facilities. Its first Dung Quat refinery is expected to become operational in early 2009.
The communist-ruled nation is estimated to import 13.2 million metric tons of petroleum products this year, up 20 per cent on year. (Local sources)
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