As of May 1, oil and gas importers have been allowed to set their own oil prices, in accordance with the Government’s Decree 55. However, the best way to regulate price increases that best serve citizens, business and the State, remains a hot issue.

By the end of May 2, the price of petrol at pumping stations on Doi Can, De La Thanh and Son Tay streets in Hanoi, was VND11,300 per litre for A95 petroleum and VND11,000 for A92 petroleum. Elsewhere, petrol prices remained steady, as in Vinh City, Central Nghe An province.

Nguyen Tan Hai, a citizen from Vinh City, said petrol prices in Vinh are VND300 per litre higher than the price set by the inter-ministries of trade and finance. The price of A95 petroleum was VND11,500.

Petrol prices in Hai Phong City also show no sign of increase. Hoang Van Thanh, a Hai Phong citizen, said there is no change in petroleum prices in the Hong Bang or Le Tran districts on the center city. It is VND11,000 per litre for A92 petroleum and VND11,500 per litre for A95 petroleum.

Nguyen Cong Song from Hoan Kiem precinct, Hanoi, said petrol prices are decided by oil and gas importers. Currently, they are suffering from losses due to high import prices, even with additional tax breaks. If enterprises continue to suffer from losses and the Government does not compensate for these losses, enterprises will have to raise prices or they will go bankrupt.

There are three main reasons why oil and gas importers have not increased petrol prices while the world’s oil prices have increased in the past two weeks.

First, to deter enterprises from raising their prices too soon after the Government’s Decree 55 came into effect from May 1, inter ministries of trade and finance reduced the petrol import tax from 10 percent to 5 percent.

Second, the Vietnam Oil and Gas Corporation (PetroVietnam) is the country’s biggest petroleum importer, accounting for 60 percent of the market share, so many small enterprises are waiting for PetroVietnam to make a move before they decide to raise prices.

Third, 11 major oil and gas importers are State-owned enterprises so they must consider the bad effect that a petrol price hike would have on the national economy, especially during the holidays.

Regarding the future adjustment of petrol prices, deputy director of the Vietnam National Petroleum Corporation, Bui Ngoc Bao said the adjustment should be based on prices in the international market. After the national holidays, enterprises should monitor the market trend and make a proper decision. However, market stability plays an important factor. Enterprises should take measures to stabilize business activities.

Another problem is how to increase prices properly. According to the Ministry of Finance (MoF), petrol import-export enterprises are suffering from losses (around VND1,300 per litre). However, the price management department under the MoF warned that enterprises should increase the petrol price by a maximum of VND1,000 per litre. This increase will not affect the consumer price index in the coming months and should benefit the national economy. Moreover, the price management department has forecast that the price of petrol will stand at US$65 per barrel from now until late this year, so it is likely that there will not a sudden change in petrol prices. Besides, as regulated, if enterprises want to increase the selling price, they should give proper reasons to the inter-Ministries of Finance and Trade for consideration.

Another problem is that it is necessary to control speculation in the market. For example, some enterprises cooperated in limiting the volume of goods being sold in the market, then increased the selling price in order to make a profit. However, the MoF said that management agencies should root out the fraud.