VN to continue support for fuel price fund

Fuel price stabilisation fund helps the central government manage domestic fuel price in a foreseeable future.

VN to continue support for fuel price fund


Cars refuel vehicles at a fuel station in Ha Noi. The new Government Decree 83, which oversees regulations on fuel trading in the country, is said to continue support for a fuel price stabilisation fund.


Fuel price stabilisation fund helps the central government manage domestic fuel price in a foreseeable future, said Hoang Anh Tuan, deputy head of the domestic market department under the Ministry of Industry and Trade in a recent meeting with industry leaders.

The new Government Decree 83, which oversees regulations on fuel trading in the country, will continue to sanction the controversial fund.

Fuel traders and transport companies have argued that the fund, which is funded by fuel consumers for the most part and therefore effectively adds to fuel price, delivers little to no benefits for traders and consumers alike. In addition, it also creates a gap between the domestic price for fuel and that of the international market which may encourage certain fraudulent activities and cross-border smuggling.

The Government, however, has always maintained that the fund serves as a tool to manage domestic fuel price and is a necessity to make sure the interests of consumers and businesses are protected. The fund is part of an effort to keep fuel price in line with market mechanisms under the State management and help control inflation and stabilise the macroeconomy.

 

In the last five years, domestic fuel price has been well-regulated as fuel trading activities becomes more transparent and efficient, said Tuan, adding that the new decree is to continue building on the existing legal mechanisms while trying to address a number of shortcomings and limitations.

In order to do so, the ministry will carry out large-scale surveys among fuel traders to gather inputs and opinions on how to improve current regulations. Business conditions will also be cut to help new players gain entry to domestic fuel trading market and minimize resource waste.

According to a ministry’s report, the fund spent over 1.7 trillion VND (US$73 million) to maintain a stable fuel price during the second quarter of 2019 alone. — VNS

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