Petrol cannot stop increasing

Recorded in the early morning hours of May 28, 2022, according to Vietnam time, the price of WTI light sweet crude oil delivered in July 2022 stood at $115.07/barrel, up $0.98/barrel during the session.

Meanwhile, the price of Brent oil delivered in July 2022 stood at 119.25 USD/barrel, up 1.85 USD/barrel during the session.

Oil prices rose in the session on Friday (May 27) before the Memorial Day holiday begins, which is also the beginning of the time when gasoline demand in the US is at its highest.

Closing the session, Brent crude oil price increased 1.7% to 119.43 USD/barrel, while US WTI crude oil price increased 0.9% to 115.07. For the week, Brent oil prices increased by 6%, and WTi increased by 1.5%.

Prices have been supported by strong fuel demand worldwide, with both gasoline and heating oil futures outperforming crude this year.

Oil prices rose sharply on May 28 in the context that global consumption demand is expected to increase sharply in the summer along with concerns about supply tightening as the EU is approaching a Russian crude oil embargo.

According to data just released by the US Energy Information Administration (EIA) on May 25, US gasoline inventories fell by 482,000 barrels last week, to 219.7 million barrels. Demand for oil in the US is forecasted to continue to increase strongly when the tourist season takes place in the summer in the US.

Oil prices increased sharply today because the market received information that OPEC + will not increase output compared to the target output level at the meeting on June 2.

The strong depreciation of USD is also a factor to support crude oil prices to increase sharply in recent trading sessions.

The amount of Russian crude oil transported on tankers is at a record level, of which China and India are major customers.

The evolution of oil prices and the general financial market in recent days showed that cash flow has returned somewhat to risk assets, after the minutes of the Fed meeting showed no surprises on interest rate policy, with a cautious approach. It is important to avoid an increase of 75 percentage points in order to avoid destabilizing the market.

This is one of the main reasons for the cash flow to move to the commodity market yesterday and today, helping oil get out of a narrow trading range after a struggling week.

In fact, the main fundamental factors such as the EU negotiating the embargo or the opening of Shanghai is not new information, but the low trading volume in May is a problem that causes oil prices to fall. has not yet created strong momentum. Since the beginning of the year, oil prices have increased by 50%, but still lag behind other commodities in the energy group. Like natural gas, since the beginning of the year, it has increased by more than 140% to surpass 9 USD/MMBTu this week.

When macro factors are dominating the market like now, economic indicators will have a great impact on the market. Therefore, personal consumption expenditures (PCE) in the US in April released today may become the deciding factor in the direction of the market. PCE is the Fed’s second-favorite inflation gauge, and will be closely watched before it meets next month. If this index rises sharply, it may become a factor that puts pressure on oil prices.

Petrol prices in the domestic market:

On May 23, the Inter-Ministry of Industry, Trade and Finance announced the base prices for petroleum products for the price management period from May 24.

Accordingly, at the operating period on May 23, the inter-Ministry of Industry and Trade – Finance decided to stop setting up and spending the petrol price stabilization fund (BOG Fund) for gasoline so that the domestic gasoline price would be lower than the average price. lower than the increase in world gasoline prices. In addition, the inter-ministerial decision to increase the setting up of the BOG Fund for oils in order to maintain the BOG Fund to have operating tools in the near future.

Specifically, to set up the BOG Fund for gasoline products E5 RON 92 at 0 dong/liter (previous period was 100 dong/liter) and RON 95 gasoline at 0 dong/liter (previous period was 100 dong/liter). liter), diesel at 300 VND/liter, kerosene at 300 VND/liter and fuel oil at 400 VND/kg. Expenditure of BOG Fund for E5 RON 92 gasoline at 100 VND/liter and RON 95 gasoline at 300 VND/liter (previous period was not spent), oil products were not spent.

May 28, domestic retail price of petrol Specifically as follows: After making deductions and spending using the Petroleum Price Stabilization Fund, the current selling prices of popular consumer petroleum products in the market are as follows: E5 RON 92 gasoline price is not higher than VND 29,633 /liter; RON 95 gasoline price is not higher than 30,657 VND/liter; the price of diesel oil 0.05S is not higher than 25,553 VND/liter; the price of kerosene is not higher than 24,405 VND/liter; price of mazut oil 180CST 3.5S is not higher than 20,598 VND/kg.

Economic experts say that, in the context of gasoline prices continues to increase “hot”, the stabilization fund has been exhausted, the most feasible solution to regulate prices is to reduce taxes and fees. The reduction of excise tax on gasoline will certainly help “cool down” the selling price of this item, reduce inflationary pressure, and avoid having too great an impact on the lives of people and businesses.

The story of petrol prices was also discussed a lot at the 3rd session, the 15th National Assembly. According to National Assembly member Le Thanh Van, the price of gasoline has been pushed up to the current high, negatively affecting production activities and people’s daily life, and may lead to concerns about inflation.

NA delegate Nguyen Thi Suu (Deputy Head of the National Assembly Delegation in charge of Thua Thien – Hue province) also said that some fees constituting petrol prices such as special consumption tax should be reduced…

Previously, Chairman of the Economic Committee of the National Assembly Vu Hong Thanh stated “countermeasures” on taxes, responding to the sharp increase in domestic gasoline prices. At the inspection report, Chairman of the National Assembly’s Economic Committee said that the upward trend in basic commodity prices, combined with the impact of the escalating Russia-Ukraine conflict, caused energy prices to rise to a record high. All international organizations forecast the scenario that the average oil price in 2022 will increase by about 20-30 USD (ie about 30-40%, from the average of 69 USD/barrel in 2021 to the average of 90-100 USD in 2021. USD/barrel in 2022). Golman Sachs Bank forecasts that oil prices may rise to $125/barrel in the third quarter of 2022.

Whereby, petrol prices increase will greatly affect domestic production costs, putting pressure on inflation in 2022. In the current context, the Economic Committee said, there are opinions that besides paying special attention to risks For inflation from outside, it is necessary to study the scenario of continuing to reduce excise tax to cope in case of large fluctuations in world oil prices and higher increases, as well as to postpone and delay the increase of taxes. costs to stabilize the prices of other consumer goods.