The Government Office has just issued Official Dispatch No. 5124 conveying the direction of Deputy Prime Minister Le Minh Khai on studying information, press reports and recommendations on the establishment of a petroleum trading floor.
According to the Government Office, some press agencies published the opinions of experts that, in order to be transparent and ensure harmony of interests among businesses, it is necessary to consider applying the model of a petroleum trading floor.
Experts believe that the establishment of a petroleum trading floor can bring many benefits to Vietnam. When the petroleum trading floor is put into operation, information on prices and transaction volumes will be made public, thereby minimizing the possibility of price manipulation, creating a flexible and fast pricing mechanism and improving the process of distributing and circulating petroleum.
In addition, economic experts said that in the current context of the petroleum market, although there is still a State monopoly, there is basically private participation in retailing, so it is still possible to set up a floor. Moreover, the new Decree allows a retail enterprise to buy goods from many sources, which creates the premise for setting up a floor.
Regarding this issue, Deputy Prime Minister Le Minh Khai assigned the Ministry of Industry and Trade to preside over and coordinate with relevant ministries and agencies to review and study information, press reports, and make recommendations on the establishment of a petroleum trading floor to increase transparency and overcome recent instability in the petroleum market. On that basis, appropriate implementation solutions will be developed according to authority and legal regulations. In case of exceeding authority, reports will be made to the Government in July.
The idea of establishing a petroleum exchange was previously mentioned by some experts and businesses.
At a conference in May, Mr. Hoang Trung Dung, General Director of the Additives and Petroleum Products Development Joint Stock Company (APP), said that currently, the distributors are allowed to buy gasoline from two refineries and import. However, the Ministry of Industry and Trade is developing regulations in the direction of not allowing 300 distributors to buy goods from each other and also not to get goods directly from the two domestic refineries.
The representative of this business believes that the above provisions will interfere with and limit the freedom of distributors. Therefore, he proposed that the management agency study the establishment of a trading floor for this item like a coffee floor to make it public, helping distributors access the source of goods.
According to expert Nguyen Hoang Dung, member of the National Macroeconomic and International Integration Advisory Group, establishing a petroleum trading floor will bring many benefits in publicizing information on prices and transaction volumes. From there, the possibility of price manipulation is minimized, ensuring a flexible pricing mechanism, improving the distribution and circulation of petroleum.
Mr. Pham Ngoc Hung, former Vice President of the Vietnam Association for Anti-Counterfeiting and Brand Protection, also said that establishing a petroleum trading floor has several advantages. One is transparent prices, no handshakes, no backdoor dealings, no left-handed selling to the right-handed, increasing competition, helping businesses have more options with more reasonable prices as well as preventing the risk of disruption in petroleum supply.
In addition, domestic and foreign enterprises participating in the floor will also proactively build warehouse and transportation systems to ensure competitiveness. This will also help reduce pressure on national reserves and ensure energy security.
Economist Nguyen Minh Phong also assessed that in the current context of the petroleum market, although there is still a state monopoly, there is basically private participation in retailing, so it is still possible to set up a floor. Moreover, the new decree allows a retail enterprise to buy goods from many sources, which creates the premise for setting up a floor.
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