Squeezing low gas prices can cause great economic damage

Responding to a reporter in the corridor of the National Assembly on the afternoon of June 1 about the continuously increasing price of gasoline over the past time, Mr. Nguyen Hong Dien, Minister of Industry and Trade affirmed that Vietnam’s gasoline price is lower than the world gasoline price. Due to such price difference, there is a situation of petroleum smuggling, domestic gasoline “flows” to foreign countries.

According to Mr. Dien, the perception that the price of petrol and oil will increase will increase the price of goods, which can lead to a recovery program economy being broken is not wrong, but it must be understood that our country’s economy has a very high openness, goods are made mainly for export.

If input prices are pressed to reduce product costs, they will not reflect the actual value, causing damage to the country’s economy.

“Vietnam’s goods are produced to sell to consumers, for export. The cost of the product does not reflect the correct value, is it damaged?”Mr. Dien said.

Minister of Industry and Trade: Squeezing low gasoline prices can cause great economic damage - 1

Petrol price increased to the highest ever, to 31,570 VND / liter of RON 95 gasoline from the afternoon of June 1 (Artwork)

According to Mr. Dien, at present, Vietnam is a trading partner of many countries and territories. If we force input prices, we will face lawsuits about anti-dumping, anti-subsidy, and even be sued for currency manipulation. In addition, this also occurred the situation of smuggling gasoline across the border.

“In the meantime, to control gasoline prices, on the one hand, we must use tools, including taxes and fees, and strengthen market control to reduce prices. In case the price continues to increase, we need to use security policy, support for the disadvantaged. Only then will it harmonize both inside and outside. But if it only leans in the direction of forcing prices to be really low, it will invisibly cause great damage to the country’s economy.” Mr. Dien said.

The Ministry of Industry, Trade and Finance has just announced an increase in the price of RON 95 gasoline from 3pm on June 1. Accordingly, gasoline E5RON92 increased by 602 VND/liter, sold at 30,235 VND/liter; RON95 gasoline increased by 921 VND/liter, sold at no higher than 31,578 VND/liter.

Prices of oil commodities have increased. Kerosene is 25,340 VND per liter, an increase of 940 VND. Diesel oil increased to 26,390 VND per liter, up 840 VND. Fuel oil is 20,900 VND per kg, an increase of 310 VND.

This is the 5th price increase since April 21 up to now. The total price of gasoline RON 95 is more expensive by 4,260 VND per liter, E5 RON 92 also increases by 3,760 VND per liter.

In this period, the operating agency also spends using the Petroleum Stabilization Fund at 500 VND per liter for RON 95 gasoline, 100 VND for E5 RON 92. Particularly, oil products will stop spending from the Stabilization Fund.

The Ministry of Industry, Trade and Finance continued to stop deducting the petrol and oil stabilization fund, increasing the amount of fund deduction for diesel oil to 100 dong, fuel oil to 300 dong per kg; and reduce the deduction for kerosene from 300 dong to 100 dong per liter.

In the previous operating period, the Inter-Ministry of Industry, Trade and Finance increased prices for both E5 RON92 and RON95 gasoline. Specifically, the price of gasoline E5 RON92 increased by 674 VND/liter, to 29,633 VND/liter; RON95 gasoline increased by 669 VND/liter to 30,657 VND/liter.

Meanwhile, the price of oil products was adjusted down. Diesel oil decreased by 1,097 VND/liter to 25,550 VND/liter. Kerosene decreased by 763 VND/liter to 24,400 VND/liter. Fuel oil decreased by 962 dong to 20,590 dong/kg.

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