Although there are still 3 days until the operating period, petroleum businesses believe that domestic gasoline and oil prices will drop sharply due to the continuous decline in world oil.
At 6:30 a.m. on September 18 (Vietnam time), an update on Oilprice showed that the US WTI crude oil price traded at $85.1/barrel, up 0.01%; Brent crude traded at $91.35 per barrel, up 0.5%. Although inched up in the last trading day of the week due to the impact of the oil spill in Iraq, but for the whole week, oil prices lost nearly 2%. From the beginning of the third quarter to now, Brent and WTI oil have decreased by about 20%.
Meanwhile, the latest update from the Ministry of Industry and Trade (as of September 14) shows that the price of A95 gasoline in Singapore market is at 103.7 USD/barrel, A92 gasoline is at 99.6 USD/barrel, diesel at 123.7 USD/barrel.
Before the downward movement of the world oil price, shared with VTC News , the leader of a leading petroleum business said that the world oil price fell, surely the domestic price would also decrease. From now until the date of price adjustment, if the world oil price continues to fall or is maintained as it is, the domestic gasoline price will continue to go down.
“In the next operating period, the price of gasoline may decrease by about 500-700 VND/liter, diesel oil will drop more sharply, about 1,500-2,000 VND/liter. However, the specific reduction depends on the provisioning and spending. using the Price Stabilization Fund (BOG)”, he said.
At the previous price adjustment period, the Inter-Ministry of Industry and Trade – Finance announced to adjust the retail price of gasoline in the country in the direction of reducing most of the items. Accordingly, the price of RON95 gasoline decreased by 1,015 VND / liter, sold at 23,215 VND / liter, E5 RON92 gasoline decreased by 1,128 VND / liter, sold at 22,231 VND / liter.
Similarly, diesel oil price decreased by 1,008 VND/liter, sold at 24,180 VND/liter. With this reduction, the price of diesel oil continues to be higher than the price of gasoline.
In this operating period, the Inter-Ministry to set up the Price Stabilization Fund with E5 gasoline is 451 VND/liter; RON95 gasoline is 450 VND/liter, diesel oil is 90 VND/liter, kerosene is 200 VND/liter and fuel oil is 741 VND/kg. At the same time, the operator stopped spending on the Price Stabilization Fund for petroleum products.
Petrol market is “out of phase”
Recently, many businesses, agents and retailers of petrol and oil complained of no supply, low discounts, prolonged losses… Meanwhile, the authorities confirmed that there was no shortage of supply, fully meet the needs of production and consumption. So the cause from?
Answering VTC News about this situation, economic expert, Assoc. Prof. Dr. Ngo Tri Long, former deputy director of the Institute for Price Market Research (Ministry of Finance), said that the mechanism for managing and operating the gasoline market Currently, oil is still inflexible and does not follow the actual operation of the market. This is the main reason leading to the “phase difference” in the petroleum market in recent days.
“The total supply of petroleum may be equal to the total demand, but at different times, in different locations… it may not be balanced. Decree 95/2021/ND-CP stipulates that the time between two operating periods is once every 10 days, which is still too long. We see that recently, the world gasoline price has fluctuated continuously recently, but the domestic market is still waiting for a new adjustment date. The price management is clearly not active, less flexible, still rigid,” said Mr. Long.
Mr. Long, for example, during the past holiday, the world market’s petrol price fluctuated strongly, the market was “hot”, but the domestic price was still “calm” because of waiting for the agency holiday. New function meeting to adjust price. This has a negative impact on both consumers and petroleum businesses.
Assoc. Prof.Dr. Dinh Trong Thinh also said that the problem with the current petroleum market lies in the way it is managed and operated, including the unpredictable fluctuations in petroleum business activities in the Vietnamese market.
According to experts, some specific reasons can be pointed out as follows. Firstly, the time between the two operating periods is long, while the world price fluctuates continuously, causing difficulties for importers. When an enterprise imports at a high price and sells it at a low price due to the prolonged operating period because it coincides with a holiday and does not follow the world price, it will cause the importer to make a loss. This leads to businesses not wanting to sell, holding back to avoid losses. It is also difficult for the State to force them to sell, because they find ways to avoid detection and punishment.
Secondly, recently the Ministry of Industry and Trade withdrew the license of a series of focal enterprises. While according to regulations, franchise stores and retailers can only import goods from one distributor. So when the key business has its license temporarily revoked, the agents and shops behind will not have gasoline to sell. The sanction but not calculating the ability to supply goods for agents and retailers caused many places to cut off the source of goods, to hang signs of out of stock.
Third, the pricing mechanism is not reasonable. For example, shipping costs from Singapore to Vietnam were about 1 USD/barrel, now 2-3 times higher, but still keeping the norm of 1 USD/barrel is not good. Or in terms of emission standards, Vietnam regulates gasoline prices according to Euro 3 emission standards, while the world applies Euro 5 standards (the difference is about 7-8 USD/barrel). Thus, the import enterprises have to bear the high difference, if the management agency does not re-price, it cannot be.
“It is time for the Ministry of Industry and Trade to balance supply and demand, how to stabilize petroleum import hubs. At the same time, it is necessary to consider many angles in the operation of the operating mechanism to balance and apply strong economic measures, but also avoid shocks like the recent when the licenses of some enterprises were revoked. clues, has led to the opposite effect as expected”, Mr. Thinh commented.
According to economic expert, Dr. Vu Dinh Anh, former deputy director of the Institute for Price Market Research (Ministry of Finance), the key point is to create a truly competitive market. Mr. Anh said that at present, there is almost a complete lack of competition between retail gas stations, or the so-called final system. This causes retailers to complain about the discount story because there is no other option. The reason is that agents and retailers cannot switch from one focal enterprise to another.
Since then, Mr. Anh suggested the management agency must re-establish the petroleum market, including the wholesale stage, ensuring the competitiveness of the focal enterprises and ensuring the flexibility of the petroleum retail system. when there is a change from the focal enterprise.
In addition, there must be an appropriate price mechanism, associated with the management of price stabilization through measures such as cutting budget revenues or taxes, fees, etc. uniformity in management and administration.
Assoc. Prof. Dr. Dinh Trong Thinh stated that, in order to stabilize the petroleum market, the governing body must re-examine the entire production and import supply for the economy; firmly grasp data from key enterprises, avoid reporting data on one side, reality on the other, thereby balancing to ensure supply. Pay attention to the supply of each location, each locality is different… and must have a data warehouse for synchronous management and administration.
Secondly, review the price mechanism as well as the way to manage gasoline for better management. Review the way the petroleum market is organized today, thereby ensuring that businesses have profit norms in accordance with state regulations.
Besides, shorten the adjustment time to 1 week or 5 days/time. If the time between the two operating periods can be shortened, the stabilization fund can be abandoned…to fuel and oil according to the market mechanism. In particular, it is necessary to build an open and transparent petroleum market.
According to Mr. Ngo Tri Long, one of the other important solutions is to invest in building a strategic petroleum reserve system, both to help prevent price shocks from the outside, and to help operate smoothly. than.
Currently, petroleum reserves in Vietnam are now common at nearly 10 days and this is a dangerous thing. Currently, many countries can store petroleum up to 3 months. There are two types of reserves here: corporate reserves and state reserves. These 2 reserves are currently unbalanced, we only rely on corporate reserves mainly.
“Of course, businesses want to reserve with a few days, because they don’t want to put too much capital into it but the price fluctuates frequently, the risk will be high. But storing a few days will have implications for energy security as well. To overcome this limitation, the state needs to invest in building a system of strategic petroleum reserves, while ensuring energy security, “ said Mr. Long.