New proposal on the petrol and oil price regulation dates in Vietnam

New proposal on the petrol and oil price regulation dates (Image from the internet)

New proposal on the petrol and oil price regulation dates in Vietnam

The Ministry of Industry and Trade of Vietnam is currently soliciting feedback on a draft Decree amending Decree 95/2021/ND-CP and Decree 83/2014/ND-CP regarding petrol and oil trading.

Within this framework, two options for petrol and oil price regulation are proposed as follows:

- Option 1: Maintain the current regulation on the date of petrol and oil price regulation/announcement;

- Option 2: Amend to shorten the date of petrol and oil price regulation/announcement to 7 days, specified on a particular day of the week.

For Option 2, the interval between price regulation/announcement cycles would be reduced from 10 days to 07 days, scheduled for every Thursday, irrespective of holidays.

The rationale for this adjustment is to ensure petrol and oil prices more closely follow global market trends.

The regulation will be implemented even on holidays to avoid significant price fluctuations during holidays, thereby protecting the interests of consumers and petrol and oil trading businesses.

Current petrol and oil price regulation dates in Vietnam

According to Decree 95/2021/ND-CP, the date for petrol and oil price regulation is on the 1st, 11th, and 21st of each month.

If the regulation cycle coincides with a public holiday as stipulated by the state, the date is postponed to the next working day after the holiday. In the event that the regulation cycle coincides with the Tet holiday, the date is postponed to the subsequent regulation cycle.

If petrol and oil prices experience unusual fluctuations significantly impacting socio-economic development and the populace, the Ministry of Industry and Trade of Vietnam is responsible for reporting to the Prime Minister of the Government of Vietnam to consider and decide on a suitable time for petrol and oil price regulation.

Additionally, several principles for petrol and oil price regulation are stipulated as follows:

- petrol and oil selling prices are determined according to market mechanisms, regulated by the State, in accordance with global petrol and oil price trends and the socio-economic conditions of each period

- Key petrol and oil trading enterprises and petrol and oil distributors have the right to decide on wholesale prices. Based on the actual conditions at the enterprise, key petrol and oil trading enterprises and distributors decide on retail petrol and oil prices (except for Mazut oil, which is sold at wholesale prices) within their distribution network, consistent with actual incurred costs, and not exceeding the regulated prices announced by competent state agencies.

- For areas far from ports, main depots, or petrol and oil production facilities, if reasonable, valid (audited) actual costs incurred lead to higher selling prices than the regulated prices, key petrol and oil trading enterprises may decide the actual selling prices in those areas (after notifying the Ministry of Industry and Trade of Vietnam) to cover incurred costs but not exceeding 2% of the regulated prices announced at the same time.

- Key petrol and oil trading enterprises and petrol and oil distribution enterprises are responsible for notifying the Ministry of Industry and Trade of Vietnam and the Ministry of Finance of their petrol and oil selling prices immediately after deciding on their petrol and oil prices.

- In cases where the cost components fluctuate, causing the basic price to increase by over ten percent (>10%) compared to the preceding basic price or when significant petrol and oil price fluctuations impact socio-economic development and the populace, the Ministry of Industry and Trade of Vietnam is responsible for reporting to the Prime Minister of the Government of Vietnam to consider and decide on specific regulatory measures.

- The basic prices announced by the state for petrol and oil products are those commonly consumed in the market.

Chau Thanh

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