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Tuesday, July 16, 2024

VCCI proposes allowing businesses to set fuel retail prices

By N.Tan

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HCMC – The Vietnam Chamber of Commerce and Industry (VCCI) has written to the Government suggesting fuel retail prices be decided by businesses based on supply and demand to prevent fuel shortages.

VCCI also proposed doing away with the fuel price stabilization fund as it has failed to stabilize the fuel market.

Recent fuel shortages and supply disruptions have been mainly attributed to haphazard price management amid global economic and geopolitical uncertainties, according to VCCI.

Imposing sanctions against gas stations for their unapproved temporary closure is just a temporary solution to fuel shortages, as those stations will continue suffering losses if input costs remain higher than retail prices.

The Ministry of Industry and Trade recently drafted a new government decree on fuel trading with two options.

The first is the Government should continue regulating fuel prices with adjustments in pricing methods. Meanwhile, the second is retail fuel prices should be decided by fuel enterprises under the management of the Government.

As the ministry favors the first option, VCCI said it is concerned about the feasibility of this option and the possible repetition of supply disruptions in the future.

Given the situation, VCCI proposed choosing the second option. As regulated by supply and demand, fuel prices would allow trading firms to offset input costs.

To promote competition, gas stations of different companies should be allowed to be opened close to one another and to buy fuels from more than one supplier.

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