Adjustment Principles for Gasoline and Oil Prices: When to Implement Price Adjustments?
On what principles is gasoline price adjustment based?
According to the regulations at Clause 2, Article 38, Decree 83/2014/ND-CP (as amended by Clause 27, Article 1, Decree 95/2021/ND-CP), it is stated as follows:
Principles of gasoline pricing management
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2. Major gasoline trading enterprises and gasoline distribution enterprises have the right to decide the wholesale price. Based on the actual situation of the enterprise, major gasoline trading enterprises and gasoline distribution enterprises decide the retail price of gasoline (except for mazut oil, which is wholesale price) within their distribution system, in accordance with the actual incurred costs at the enterprise, and not higher than the regulated price announced by the competent state agency.
For areas far from ports, main hubs, or gasoline production facilities, if reasonable and legitimate actual incurred costs (audited) lead to prices higher than the regulated price, the major gasoline trading enterprises can determine the actual selling price in that area (reported to the Ministry of Industry and Trade) to cover the incurred costs, but not exceeding 2% of the regulated price announced at the same time.
Major gasoline trading enterprises and gasoline distribution enterprises are responsible for notifying the pricing to the Ministry of Industry and Trade and the Ministry of Finance immediately after deciding the retail gasoline price of the enterprise.
Therefore, the retail price at gasoline selling stores is decided by the major gasoline trading enterprises and gasoline distribution enterprises (excluding mazut oil). Additionally, the selling price should not be higher than the regulated price announced by the competent state agency.
Principles of gasoline price adjustment? Are spontaneous gasoline trading activities prohibited?
When is the gasoline price adjustment implemented?
Based on Clause 3, Article 38, Decree 83/2014/ND-CP (as amended by Clause 27, Article 1, Decree 95/2021/ND-CP), there are regulations on the timing of gasoline price management:
Principles of gasoline pricing management
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3. Timing of gasoline price management
Gasoline price management timing is on the 1st, 11th, and 21st of each month. For management periods coinciding with a holiday, the management timing is moved to the next working day after the holiday. For periods coinciding with the Lunar New Year holiday, the management timing is moved to the next management period.
In case of abnormal price fluctuations of gasoline products, greatly affecting economic-social development and people's life, the Ministry of Industry and Trade is responsible for reporting to the Prime Minister of the Government of Vietnam to consider and decide on a suitable management timing.
Thus, gasoline prices are typically managed on the 1st, 11th, and 21st of each month. If these dates coincide with holidays, the timing will be moved to the next working day. If coinciding with the Lunar New Year holiday, the management period will shift to the next management period. However, in case of abnormal fluctuations, the Prime Minister of the Government of Vietnam will consider and decide on a suitable adjustment timing.
Are spontaneous gasoline trading activities prohibited?
According to Article 35, Decree 99/2020/ND-CP, acts of selling gasoline through mini pumps, hand-operated pumps, tanks, cans, bottles, and other containment devices, except for traders who are business households, gasoline supply stations belonging to the armed forces (national defense, police) in mountainous, highland areas as prescribed by law, approved by the provincial people's committee to act as gasoline retail agents with a scale and equipment suitable for the gasoline business conditions in those areas, are violations of the law and are subject to fines ranging from VND 3,000,000 to VND 5,000,000.
However, on November 4, 2022, the Hanoi People's Committee issued Official Dispatch 3694/UBND-KTN in 2022 on implementing Official Telegram 1039/CD-TTg dated November 2, 2022 of the Prime Minister of the Government of Vietnam regarding the management and operation of gasoline products.
To strictly address the situation of gasoline trading through bottles, cans, and containers of unknown origin and substandard quality at some spontaneous gasoline selling points and to effectively implement Official Telegram 1039/CD-TTg dated November 2, 2022 on the management and operation of gasoline products, the Standing Committee of the 389 Municipal Steering Committee requests the relevant provincial departments and authorities, along with the 389 district-level Steering Committee, to carry out the following tasks:- Enhance local management, assign officials for regular supervision at gasoline trading businesses in the city:+ Coordinate with functional forces to inspect and supervise the entire system of gasoline trading enterprises in all types;+ Check compliance with the regulations on price listing and selling at the listed prices;+ Timely detect and strictly handle acts of hoarding, reducing quantities, shortening selling hours, closing shops, or temporarily suspending business activities not conforming to the gasoline trading laws;- Relevant functional forces to strictly penalize gasoline violations according to regulations, decisively handle spontaneous gasoline trading activities through bottles, cans on some roadways, contributing to maintaining market order and safety in firefighting, traffic safety for road users;- Supervise and inspect the business activities of retail gasoline stores; strictly handle violations to prevent occurrences of unjustified suspensions of sales; revoke certificates of eligibility for gasoline retail stores that violate regulations.
- Absolutely prevent illegal gasoline trading activities (spontaneous gasoline selling points) to avoid profiteering, destabilizing the gasoline market, posing a high risk of fire hazards, road safety threats, and street aesthetics.
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See the full guidance on the management and operation of gasoline products in Hanoi city at Official Dispatch 3694/UBND-KTN in 2022.
Thus, the act of selling gasoline through mini pumps, hand-operated pumps, tanks, canisters, bottles, and other containment devices, and spontaneous gasoline selling points of unknown origin and substandard quality to profiteer and destabilize the gasoline market is strictly prohibited and will be penalized according to legal regulations.
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