Enterprises urge petrol price stabilisation fund to be ended

Petrol businesses are calling for the price stabilisation fund to be abolished to ensure the appropriateness to the current market situation.

Trần Ngọc Năm, Deputy Director General of Việt Nam National Petroleum Group (Petrolimex), said at the conference to raise opinions on the new draft decree about petrol business on Tuesday that petrol prices are now reviewed every seven days, meaning that the adjustments at each review will not be too huge or have significant impacts on the socio-economic development.

As the domestic petrol prices are also going parallel with the world market, the removal of the petrol price stabilisation fund should be considered, he said, adding that in recent times, the fund has proved not to work as efficiently as it should.

Meanwhile, the existence of the fund causes a lot of difficulties for enterprises in reporting and inspections.

Cao Hoài Dương, chairman of PetroVietnam Oil Corporation (PVOIL), said if the fund can not be removed, it is necessary to have more detailed regulations to ensure transparency and remove difficulties.

Regarding the proposal related to increasing petroleum reserves from currently 20 days to 30 days in the draft, Năm said that this will burden enterprises. It is the Government to ensure reserves, not all on enterprises, he said.

Petrolimex estimated that if the reserve requirement is increased to 30 days, it will cost the entire market an additional sum of VNĐ900 billion (US$35.4 million), not to mention risks from huge price fluctuations and exchange rates, if happens, in the world marketing during the time.

According to Dương, the reserve at 20 days is appropriate. Any increase might create a significant financial burden on businesses, he said.

Dương added that it is also necessary to take into account the reserves of two refineries, Bình Sơn and Nghi Sơn, which have crude oil reserves equivalent to 20-30 days of operation.

Phan Văn Chinh, Director of the Domestic Market Department under the Ministry of Industry and Trade, said that it will be difficult to abolish the petrol price stabilisation fund at the moment.

Chinh said that the proposal of maintaining reserve requirements will be considered to facilitate operation.