Petroleum companies may only charge a maximum rate of 20% according to proposed regulation.

New Decree on Gasoline Prices: Balancing Competition and Transparency in Vietnam’s Fuel Industry

The Ministry of Industry and Trade is proposing a new decree on gasoline prices regulation, which aims to create a more competitive environment for businesses and increase their autonomy in setting prices. The current regulations set a base price, which serves as a ceiling price for businesses to determine their retail prices. However, the Ministry believes that this mechanism is too complex and does not reflect current market conditions.

In the new draft, the Ministry suggests that the State should not regulate gasoline prices and instead allow businesses to calculate their own maximum selling price based on the average world price and some fixed costs. This period of announcement will be shortened to 7 days instead of 15 days. Business expenses and profit norms will be added to calculate the maximum selling price, and businesses will have two options for determining these costs.

The Ministry believes that this new mechanism will create a more competitive environment for gasoline prices by allowing businesses to proactively decide on their prices. The draft also includes regulations related to the Price Stabilization Fund and requires periodic reporting on warehouse use by focal points. Overall, the goal of the new decree is to streamline the process of setting gasoline prices and make it more reflective of market conditions.

The Ministry has consulted with stakeholders since April 1st, just five days after releasing its first draft. Under current regulations, the State sets a base price that serves as a ceiling for businesses to determine their retail prices. However, this mechanism involves too many steps and does not allow businesses to proactively decide on their prices.

The new decree proposed by the Ministry aims to give businesses more control over gasoline pricing by allowing them to calculate their own maximum selling price based on historical factors such as world pricing trends and some fixed costs.

This change in regulation has been met with mixed reactions from stakeholders who are concerned about how it could affect consumers’ purchasing power. Nevertheless, supporters of this proposal argue that it would create a more competitive environment for businesses while also providing greater transparency in pricing.

It remains unclear whether or not this decree will be approved by lawmakers; however, if implemented successfully, it could significantly impact how gasoline is priced in Vietnam in years to come.

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