Vietnam National Petroleum Corp (Petrolimex), the country’s largest fuel distributor with some 70 percent market share, will make public the detailed formulation for prime cost and retail prices next week.
The move, to be available at www.petrolimex.com.vn, follows a recent decree -- allowing petroleum traders to regulate prices themselves to usher in a market mechanism -- Petrolimex’s general director, Bui Ngoc Bao, said.
The prime cost includes the prices of refined petroleum products imported from Singapore, taxes, and marketing and distribution costs.
The pump prices will include retailers’ costs and profits.
The recent VND590 (3.1 US cents) price hike took a liter of A92 grade gasoline to VND16,990 (89 US cents), or around VND2,000 (10.5 US cents) higher than in the US, Ngo Tri Long, former deputy head of the Market and Pricing Research Institute, said last Saturday.
But there cannot be a market mechanism as long as Petrolimex holds the lion’s share, he said, adding the government must therefore monitor and regulate prices since the monopoly could distort the market.
The prime minister ordered the industry and trade and finance ministries last Friday to investigate the price hikes announced by oil companies.
The hikes are likely to have a knock-on effect on the prices of most other goods and services, making the task of containing inflation under 7 percent this year very difficult.
The head of the Government Office, Nguyen Xuan Phuc, admitted to the media that the sudden price rise was a result of faulty management by the government.
While the oil companies raised prices by 8.76 percent, the price of imported gasoline only went up by 3.75 percent.
Le Xuan Nghia, vice president of National Supervision Board, said fuel prices in Vietnam are 5 percent higher than international prices.
Retail prices have been revised up twice and down once since the decree took effect in mid-December, with both hikes being higher than the increase in import prices.
Petrolimex has increased the profit margin for retailers from VND600-700 to VND800-1,000 now.
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