Why does the price of gasoline not decrease “shockingly” as it increased?

At today’s adjustment period (March 21), each liter of RON 95 gasoline decreased by VND 630, while E5 RON 92 gasoline decreased by VND 650. After the reduction, the price of RON 95 gasoline is still VND 29,192 / liter, E5 RON 92 gasoline is VND 28,330 / liter.

Specifically, as soon as the price of gasoline has decreased after 7 consecutive increases, there was an increase of nearly 3,000 – 4,000 VND / liter depending on the type, on some forums and social networks, many people questioned why the price of gasoline decrease at a “modest” level, not “shocked” as in the rise? This adjustment reduction is said to be low compared to people’s expectations and expectations consumption in the context that gasoline prices have increased very high, greatly affecting their lives and spending.

A leader enterprise Petrol said that the increase or decrease in domestic gasoline prices depends on world price movements along with the method of deduction/expenditure of the stabilization fund.

Currently, the base price of petrol and oil includes prices from imported sources, import tax of 8%, excise tax of 10%, normative costs, normed profits, environmental protection fees, and VAT.

In the first half of the 10-day cycle after the adjustment session on March 11, the world gasoline price tended to decrease sharply. “There was a time when the domestic price was 2,500 VND/liter higher than the world price for gasoline and nearly 5,000 VND/liter for oil. But then the world price tended to increase again, narrowing the above gap.” said the leader of the petroleum business mentioned above.

According to the explanation of the Ministry of Industry and Trade, the world petroleum market continues to be complicated. Gasoline prices after falling in the mid-March days but then tended to increase again.

There is also another factor holding back the decrease in petrol prices this period, which is the implementation of setting up a stabilization fund. After a long period of continuous increase, the operating agency has to spend and use the stabilization fund. In many businesses, the stabilization fund is negative hundreds of billions of dong. Therefore, at this adjustment period, the deduction is used by the governing body. Specifically in this period, the Union Finance and the Ministry of Industry and Trade decided to set up a price stabilization fund for E5 RON 92 gasoline at 200 VND/liter, RON 95 gasoline at 50 VND/liter, diesel oil 400 VND/liter, and kerosene 300 VND/liter.

This period, the executive agency stopped spending and using the price stabilization fund for all petroleum products after a long period of continuous “discharge”. The Ministry of Industry and Trade said that in order to limit the increase in gasoline prices, in recent operating periods, the Inter-Ministry has made use of funds for gasoline and oil products at the expense of 200-1,500 VND/liter.

Because this operating period, the average price of petroleum products on the world market between the two operating periods decreased compared to the average price of the previous period, when the fund balance was almost exhausted (at 13 fund enterprises was negative), so In order to have room to manage prices in the coming periods when the market is still complicated, the two new sets decided to start making deductions.

Regarding the petroleum price stabilization fund, recently the issue of whether to keep or abandon this fund has been controversial. This issue also caused great controversy when formulating the Decree amending Decree 83 on petrol and oil trading, which is now Decree 95.

Many businesses believe that the petrol stabilization fund actually only collects money from gasoline buyers to stabilize themselves, while the responsibility for stabilization is the State’s, but cannot be placed on consumers or businesses. Not to mention, the setting up and spending of this fund is a move that interferes too deeply in the operation of the business. Enterprises also believe that the stabilization fund has caused market distortions and recently, when gasoline prices have increased continuously, the inadequacies have become more obvious.