Managing the petroleum market is still administrative in nature.
At the seminar "For the stable, transparent and effective development of the petroleum market" on the morning of July 30, National Assembly Delegate Hoang Van Cuong - Member of the National Assembly's Finance and Budget Committee said that petroleum prices are managed by tools, including base prices, tax adjustments (tax reductions when necessary) and adjustments to the stabilization fund.
Mr. Cuong said that the disadvantage of this mechanism is that the price must follow the world price, the higher the import, the higher the price. The management is still an administrative tool, the State imposes prices on petroleum businesses.
This leads to times when the operating mechanism does not ensure benefits and profits for businesses, especially gasoline distribution and retail businesses. There are periods when prices fluctuate, with no tools to intervene, businesses suffer losses and have to close.
Therefore, Mr. Cuong said that the policy development in the coming time needs to aim at amending the administrative mechanism to apply market tools for self-regulation, creating competition among petroleum businesses.
"The current management mechanism is the State administrative management mechanism, so we should switch to market tools, so that the market can regulate. Currently, we have the basis to use market tools, without worrying about being passive, because domestically produced gasoline has a fairly large source (accounting for 70%). I think that letting the market compete is the overarching factor.
"To have market tools to compete, we must have a competitive market; to have a competitive market, buying and selling must be decided by the market, with hundreds of sellers and thousands of buyers," Professor Hoang Van Cuong stated.
Equal competition is also the desire of many petroleum businesses in recent times.
Speaking to Lao Dong, a petroleum distributor said that petroleum businesses do not have equal conditions to compete fairly in the market. Especially in the relationship between wholesale traders, distributors and retailers; between large and super-large enterprises dominating the market and small and medium enterprises.
For example, there is a corporation that accounts for 51% of the market share and together with 6/32 other large enterprises, it accounts for 88% of the market share. However, the draft Decree on petroleum business is built in a disadvantageous direction and eliminates the ability of small enterprises to compete fairly and equally.
In addition, despite the current market dominance, the draft allows that enterprise to have full authority to decide on wholesale and retail prices for gasoline in the distribution system. This is inconsistent with the Competition Law.
When there is price competition, consumers benefit.
Chairman of the Vietnam Petroleum Association Bui Ngoc Bao said that petroleum is a very sensitive commodity and the Government has been concerned about it for the past 20 years.
We see that, starting from 2003 with the first decision, Decision 187, on the organization of petroleum business. Since then, we have promptly built 5 decrees to perfect the management mechanism for perfecting the organization of petroleum business.
He said that world oil prices account for 64-72% of the price structure, leading to domestic prices being completely dependent on international prices. This commodity does not completely follow the pure law of supply and demand, and is not separate from international prices.
However, according to Mr. Bao's assessment, the current petrol management mechanism is all administrative, especially the price. Because currently the "regulations are too detailed" when the management mechanism is 7 days and the state management agencies are regulating on behalf of the enterprises.
"For State management, in the coming time, we must ensure energy security, ensure supply for this economy, and let the market operate. When there is competition, consumers will always benefit," said Mr. Bao.
Mr. Pham Van Binh - Deputy Director of the Price Management Department (Ministry of Finance) said that the Ministry of Industry and Trade is being assigned by the Government to preside over the development of a decree to replace the current decree on gasoline.
"The content of the decree is being studied and we hope there will be changes in petroleum business activities, towards petroleum business activities suitable to current practical conditions," said Mr. Binh.
Source: https://laodong.vn/kinh-doanh/doanh-nghiep-xang-dau-muon-duoc-canh-tranh-binh-dang-1373513.ldo
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