In an attempt to make domestic petrol and oil prices more flexible and reduce the budgetary burden of fuel price subsidies, the Government issued Decree No. 55/2007/ND-CP on April 6 to allow enterprises that export, import, produce or process petrol and oil to decide by themselves selling prices of petrol and oil they deal in, based on world market fuel prices, import duty and input costs, in order to ensure reasonable profits for reinvestment.
In an attempt to make domestic petrol and oil prices more flexible and reduce the budgetary burden of fuel price subsidies, the Government issued Decree No. 55/2007/ND-CP on April 6 to allow enterprises that export, import, produce or process petrol and oil to decide by themselves selling prices of petrol and oil they deal in, based on world market fuel prices, import duty and input costs, in order to ensure reasonable profits for reinvestment. The State will perform indirect management through specifying petrol and oil business conditions, balancing supply and demand, purchasing or selling national reserves and controlling syndicates for fuel market monopoly and manipulation.
The State is expected to reduce price subsidies for diesel, kerosene and fuel oil and apply market selling prices to fuel oil from 2007 and diesel oil and kerosene from 2008.
According to Deputy Minister of Trade Phan The Rue, without state subsidies, which present 5% of total state budget expenditure, domestic petrol and oil retail prices will be more flexible and sensitive to world market price fluctuations, and various prices can be applied by different enterprises in different localities throughout the country instead of the present sole price.
Also under this Decree, only state enterprises satisfying the conditions of sufficient port, warehousing, transportation and distribution facilities are licensed to export or import petrol and oil. Such a license is issued by the Trade Ministry within 15 working days.
Meanwhile, larger rooms are given to petrol and oil production, processing, trading or service provision whereby all types of enterprises (traders defined by the Commercial Law) that are lawfully established, registered to conduct such business lines and have sufficient operation facilities and personnel can be licensed.
This Decree supersedes Prime Minister’s Decision No. 187/2003/QD-TTg of
Enterprises engaged in petrol and oil business that are operating under Decision No. 187/2003/QD-TTg and fail to satisfy the conditions specified in Articles 7, 10, 13, 14, 18 and 19 of this Decree may continue their operations through the end of 2007.
Attached with this Decree are specific requirements that traders must fulfill and acts they are prohibited from taking in the course of petrol and oil trading.
(Source: VietnamLaw)
