VietNamNet Bridge – Petrol distributors and producers were from yesterday authorised to set their own prices in line with market forces, according to Deputy Minister of Finance Tran Xuan Ha.

Previously, the Government set petrol and oil prices to limit sharp rises. "Amid a continuous decrease in world oil prices since the beginning of September, it is appropriate to let petrol businesses set retail prices in accordance with the market mechanism," said Ha.

Petrol distributors and producers were from yesterday authorised to set their own prices in line with market forces.

Under Decision No79/2008/QD-BTC issued by the Ministry of Finance (MoF) yesterday, petrol firms can base their prices on import charges, tax rates and other costs to make a reasonable profit.

However, before changing their prices, petrol traders must register the new rate with the ministries of Finance and Industry and Trade.

The two ministries can ask companies to reconsider their decision if the price change is considered unreasonable.

Ha said: "The new management regime is more flexible, helping petrol companies set prices in line with market signals and international regulations. It is hoped the new system will limit speculation and smuggling".

Ha also announced that the State would only compensate losses incurred by firms who had imported diesel oil prior to September 16 that had yet to be sold.

The State would also advance businesses an amount of money equivalent to the losses that they had suffered from selling petrol before July 21, which they would have to repay from future pre-tax profits.

The deputy minister said the MoF would work with petrol distributors and traders to determine exactly what losses had been incurred, and compensation payments would be made before the end of the year.

Inter-ministerial team

The MoF yesterday also issued Decision No 2013/QD-BTC to establish an interministerial inspection team to follow petrol and oil-price adjustments made by petroleum and oil businesses. This is to ensure they comply with government regulations.

The team will receive petitions from petrol firms to change prices and either accept or reject them and inform interministerial leaders, who will have the final say within three days.

If firms have not had a response within three days, they will be permitted to sell their products at the new price from the date stated in their petitions.

If the team finds the price changes unreasonable, it will inform the businesses one day before the time the change should have taken effect.

Members of the team are not banned from revealing information related to petrol businesses' price registration ahead of when they plan to officially adopt the new rate. However, petrol businesses expressed concerns over the three-day time limit, which they said was too long in a fast-changing market.

Deputy Minister Ha said it would take the team some time to assess whether the price changes were justified because there were numerous petroleum and oil products on the market. However, he said he hoped the time period could be reduced in the future.

Diesel price reduced

Also yesterday, the interministries team decided to reduce the diesel oil price by VND450 per litre as of 11am.

Under Decision No 78/2008/QD-BTC, the retail price of diesel oil 0.25S is now VND15,450 per litre, and diesel 0.05S VND15,500 per litre.

Ha said the new prices reflected the fact that the world oil and petrol prices had fallen by 5.7-9.8 per cent in September compared to the average price in August.

(Source: Viet Nam News)