Petrol mar­ket pre­pares for the world

Viet Nam News - - FRONT PAGE -

HAØ NOÄI — The do­mes­tic pe­tro­leum mar­ket is ex­pected to be­come more com­pet­i­tive and closer to world stan­dard fol­low­ing the is­suance of De­cree 83.

The new de­cree, which takes ef­fect on Novem­ber 1 and re­places De­cree 84 of 2009, cre­ates a le­gal frame­work for the do­mes­tic mar­ket to op­er­ate in ac­cor­dance with mar­ket rules.

Phan Theá Rueä, chair­man of the Vieät Nam Pe­tro­leum As­so­ci­a­tion (VINPA), told a con­fer­ence here last week that un­der the new de­cree, dis­trib­u­tors could pur­chase petrol from sev­eral whole­sale busi­nesses at dif­fer­ent prices and cal­cu­late and de­cide on their own re­tail prices. The new de­cree will also ad­mit mer­chants and fran­chisees.

Un­der cur­rent reg­u­la­tions, im­port and dis­tri­bu­tion en­ter­prises could raise or lower sell­ing prices by less than seven per cent. With the cur­rent price at VNÑ24,000 per litre, they could ad­just the sell­ing price to a max­i­mum of VNÑ1,600 per litre.

If the new de­cree takes ef­fect, en­ter­prises will be al- lowed to raise the price by no more than three per cent for each adjustment while the next adjustment must be made at least 15 days after the pre­vi­ous one.

The three-per cent price in­crease, or VNÑ700 to 750 per liter, is viewed as bear- able for the econ­omy and con­sumers.

To keep petrol prices sta­ble, dis­trib­u­tors have asked the Gov­ern­ment to re­frain from rais­ing im­port tar­iffs for six months to one year.

Buøi Ngoïc Baûo, chair­man of the Board of Man­age­ment of Vieät Nam Na­tional Pe­tro­leum Group (Petrolimex), said petrol man­age­ment was done in ac­cor­dance with world pric­ing trends, and al­low­ing traders to ad­just prices within three per cent would en­sure flex­i­bil­ity while abol­ish­ing price surges that could shock the econ­omy.

He added that the adjustment was suit­able in terms of mar­ket su­per­vi­sion and price sta­bil­i­sa­tion, as well as con­for­mity to world prices.

The new de­cree will not limit the num­ber of price de­creases and will al­low re­duc­tions that are less than 15 days apart, Baûo noted.

How­ever, econ­o­mists are scep­ti­cal about the kind of mar­ket trans­parency that the new de­cree will bring.

Ngoâ Trí Long, for­mer deputy head of the Fi­nance Min­istry’s In­sti­tute for Mar­ket and Price Re­search, said that al­low­ing price in­creases of up to three per cent with­out the per­mis­sion of man­age­ment agen­cies could make whole­salers con­spire to in­crease prices.

Long also noted that the new de- cree stip­u­lated three lev­els of price adjustment and re­quired bet­ter co-op­er­a­tion be­tween the Min­istries of In­dus­try and Trade and Fi­nance to en­sure that en­ter­prises follow the mar­ket’s price mech­a­nism.

For­eign in­vestors in­ter­ested

Rueä has pre­dicted that many for­eign in­vestors would flock to Vieät Nam when it be­gins open­ing its mar­ket in 2018.

He said the num­ber of for­eign in­vestors show­ing in­ter­est in the Viet­namese petrol mar­ket was higher than the num­ber of for­eign in­vestors show­ing in­ter­est in its re­tail mar­ket.

He added that the mar­ket could wit­ness a new trend: for­eign in­vestors would use their huge fi­nan­cial re­sources to buy avail­able petrol sta­tion sys­tems in­stead of build­ing new ones.

The as­so­ci­a­tion cal­cu­lated that each petrol sta­tion would cost around US$1mil­lion. How­ever, the trans­fer­ring price for for­eign in­vestors could reach up to $1.2 mil­lion, mak­ing do­mes­tic en­ter­prises ready to sell to for­eign com­pa­nies.

Vieät Nam’s petrol mar­ket has huge po­ten­tial be­cause most filling sta­tions were lo­cated in ur­ban ar­eas and re­main limited in moun­tain­ous re­gions.

Given a 90-mil­lion pop­u­la­tion and a fiveper cent eco­nomic growth rate per year, the coun­try should have a petrol growth of 10 per cent in­stead of just the cur­rent seven per cent, Rueä added. —

— VNA/VNS Photo Theá Anh

A cus­tomer pur­chases petrol at a filling sta­tion in Taân Bình Dis­trict, HCM City. The do­mes­tic pe­tro­leum mar­ket is ex­pected to be­come more com­pet­i­tive and closer to world stan­dard fol­low­ing the is­suance of De­cree 83 that takes ef­fect on Novem­ber 1.

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