Vietnam: Petrol Retail Companies Allowed to Set Fuel Prices

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.

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.

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.

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