Petrol is like the “blood” of the economy, price management needs a methodical strategy

Mr. Thang said: “Petroleum is likened to the “blood” of the economy. High gasoline prices will directly push up product prices, pull commodity prices, and put pressure on inflation, especially in the context that Vietnam is reopening and recovering. economy after the impact of the COVID-19 epidemic”.

– One of the reasons for the record high domestic gasoline prices is having to “carry” a lot of taxes and fees. It is not reasonable to think that gasoline is taxed at the same time as excise tax and protects the environment. In order to “hold” the price of this essential item, should excise tax be abolished?

Petroleum is an essential commodity, important for the production and consumption of the economy. The increase in gasoline prices in recent operating periods has directly impacted people’s lives and production and business activities. In the context that the economy has just experienced a “violent illness” because of the COVID-19 epidemic, controlling gasoline prices is an important factor in maintaining macroeconomic stability, so it is urgent to implement flexibly and effectively.

Currently, each liter of retail gasoline in the country is subject to many taxes, including a 10% excise tax (on the import price at the port) and an environmental protection tax (VND 2,000/liter). Tax is an important source of revenue for the national budget (taxes from petrol account for a lot), reducing taxes can affect the budget. But petroleum is an essential commodity and an input material for many economic sectors. If gasoline prices rise too high, it will lead to many other commodities, causing inflation, creating “double” difficulties for the economy.

In my opinion, to balance the 2 problems, it is possible to reduce the excise tax to some extent. Because gasoline prices increased at a high level, causing many difficulties for the economy, reducing the effectiveness of fiscal and monetary policies. When the world oil price leveled off, we could apply it back to normal.

– The world oil price fluctuates continuously, but the domestic price control is being carried out every 10 days, causing the two markets to have a phase difference. Many people think that should shorten the time between the two operating periods, what do you think?

There are many inadequacies in operating petrol and oil prices on a 10-day cycle. We build a modern market economy with international integration, fully and synchronously operating according to the rules of the market economy, under the management of the socialist rule of law state. The market economy must operate according to the laws of the market economy such as competition, the law of supply and demand, etc.

I believe that not only gasoline, but also other commodities must operate based on these principles. Our goal in price management is to be flexible, timely, at the right time, to avoid “shocks” to the economy. Previously, the price management period was 15 days/time, now it is reduced to 10 days/time (if the price management period falls on a public holiday or Tet, it will be moved to the next price management period).

However, the gap between the two operating periods is still quite long, making the domestic price always out of phase with the world market price, because the world price increases and decreases daily, while the domestic price slows down 10 days, even more.

This shortcoming in price adjustment cycle needs to be corrected to suit market fluctuations, in the direction of shortening the gap between two operating periods, maybe 1 week, 5 days, or shorter so that the price in water coincides with world prices.

– Vietnam is in the group of both low-income and high gasoline prices. Most people think that the price of petrol is too expensive compared to their income. What should the state do to support the poor and low-income people?

The poor, low-income people, self-employed… are the most vulnerable. Over the years, the Party, State, Government and National Assembly have adopted many policies to support the poor and low-income people such as preferential loans, health insurance, tuition fee exemption and reduction, and communal housing. festival…

The National Assembly Standing Committee recently also requested the Government, Prime Minister, Ministers, Heads of ministerial-level agencies to continue to regulate gasoline and oil prices, closely follow world price movements, and rationally use the Binh Dinh Fund. stabilize gasoline prices in line with the supply and demand of petroleum, contributing to controlling inflation, supporting production and business of enterprises and people’s lives.

In particular, combining the use of the Petroleum Price Stabilization Fund with tax tools and other tools to stabilize the market. In case gasoline and oil prices rise, direct support will be provided to people in difficulty (such as fishermen, the poor, low-income people…).

I know that there is also a proposal that the State set up a fund to support people in difficulty when gasoline prices are high. This wish is legitimate but needs consideration. Because the establishment of the fund will entail many problems, related to the management and financial capacity of the country.

– The Petroleum Price Stabilization Fund has been in operation for a long time, more or less effective. However, whether or not the fund should continue to be maintained is a controversial topic. What do you think about the proposal to remove this fund so that petrol prices operate according to the market?

As I said above, we are building a modern market economy, international integration, complete and synchronous, but must have the management role of the State. The goal of oil price regulation is to limit and not let the impact of world prices create fluctuations and “shocks” that adversely affect the market and domestic production and business.

The problem here is how to operate the BOG Fund flexibly and effectively. Although the fund is operated, the price must still reflect the market price to a certain extent, not “cancel” the objective laws of the market.

Petroleum is an extremely important strategic commodity. While the Government’s goal in the past few years and the coming years is still to continue stabilizing the macro-economy and controlling inflation. Without the Petroleum Stabilization Fund, the governing body would have no tools to regulate domestic gasoline prices in order to stabilize the macro-economy, control inflation as well as protect the interests of consumers.

Thus, in the current context, the maintenance of the Petroleum Price Stabilization Fund is necessary because this fund is considered as a “regulating valve”, in order to prevent a sudden increase in domestic gasoline prices when the world oil price is constantly changing. escalation. In the future, when we stabilize the supply, the domestic gasoline price closely follows the world price, the study should remove this fund.

In the long run, you need a methodical strategy and a clear script

– In addition to the solutions applied in the past time, what contingency measures do we need to take to reduce the shock of gasoline prices on the economy?

In the context of a tight oil supply, a sharp increase in gasoline demand to meet the needs of recovery after the pandemic, the conflict between Russia and Ukraine has not been resolved, and the embargo is still being introduced… gasoline price forecast Oil will continue to heat up in the near future.

In this context, we must keep abreast of developments and accurately forecast developments, market price the world, in order to have a reasonable production, import-export, circulation and consumption strategy.

In the immediate future, it is necessary to effectively use existing regulatory tools to manage domestic prices flexibly, proactively and effectively. While the Stabilization Fund has been exhausted, the necessary solution at this time is to research and reduce taxes to keep the domestic gasoline price from increasing further, to support production and business activities that are gradually recovering after the COVID-19 epidemic. 19. In case of emergency, it is possible to study a solution to inject money into the Stabilization Fund to regulate prices. When the world petrol price falls, the fund will be set up to make up for it later.

Energy security, especially petroleum, is an important issue for the nation and people’s livelihood. The Government needs to request the Inter-Ministry of Industry, Trade and Finance to have a methodical strategy and develop a clear scenario to manage gasoline prices flexibly, proactively, and harmonize the interests of the State, people and businesses in any situation. any situation.

The government must also come up with a national program to proactively respond in all situations. In which, continue to review and adjust taxes, fees, basic price components, loss norms, cost norms, profit norms, etc. base price of petrol and oil to be suitable before the actual situation, contributing to controlling petrol prices if petrol prices continue to rise. Contents within their competence will be handled by themselves, contents outside their competence shall be submitted to the National Assembly for optimal solutions.

Particularly for the problem of Nghi Son Refinery and Petrochemical Plant, it is necessary to have a comprehensive and fundamental solution to promptly solve these plant problems, ensuring energy security right from the country.

In the long term, we need to develop a national petroleum reserve strategy to stabilize supply and proactively regulate prices. Strategic reserves are not only related to costs, but also contribute to preventing disruptions in petroleum supply, ensuring the safety of energy and economic activities.

Vietnam is an oil exporting country, we must improve the exploitation and processing capacity, ensure supply, stabilize the domestic market, and limit dependence on imports.

In addition, in the context of limited supply, increasing demand for gasoline, saving, combating waste of gasoline, and converting to alternative energy are effective solutions.

– How do you evaluate the management of petrol prices in the past time?

The recent management of petrol and oil prices by ministries and sectors has made great efforts, in a timely and appropriate manner, to ensure the acceptability of the economy.

However, if you want to operate it not only based on subjective will, you need a strategy, you need to shorten the time between two operating periods, be flexible and ensure efficiency.

– Thank you sir!