A petrol station in Hanoi (Photo: VNA) According to Global Petrol Prices, the average price of gasolinein Vietnam was the 38th cheapest among 168 economies as of August 14.
Specifically, the average petroleum value for Vietnam during theperiod from May 8 to August 14 was 22,918.50 VND (1.019 USD) per litre, higherthan two other countries in Southeast Asia, Malaysia (0.444 USD per litre) andIndonesia (0.871 USD per litre). For comparison, the average price of gasolinein the world for this period was 41,915.75 VND.
Venezuela was the country with the lowest gasoline price in theworld, at 0.004 USD per litre.
Countries which had gasoline prices around two times that of Vietnamwere mostly developed economies where the income per capita was 10-20 timeshigher, such as Singapore, the Netherlands, France, Switzerland, Denmark andNorway.
The Ministry of Finance in a recent document in response toNational Assembly deputies’ queries about taxes and fees on petroleum said thatfuel prices in Vietnam were at a lower level than the region’s and world’saverage. Taxes accounted for 10-11% of oil prices and 20-23% of petrol pricesin Vietnam, compared to a rate of 45-60% in many other countries.
The highest petroleum price of Vietnam recorded on July 11 wasequivalent to only 79% of China’s, 65% of Laos’ and 78% of Cambodia’s, theministry said.
Many people said that the fairness of petroleum prices should bebased on the income per capita of each country.
A report by Vietnam Economy and Strategy Research Centre (VESS)found that petroleum was subject to a value added tax of 10%, import tax of 10%,special consumption tax of 8-10% and environmental protection tax.
Although petroleum retail prices in Vietnam were lower than manycountries, they were high with regard to the country’s income per capitacompared to some developed countries or countries with similar economicsituations such as the US, Russia, Malaysia and Indonesia, VESS said.
When petroleum prices are high, Vietnam might face inflationaryrisk as petroleum products were considered an input of the economy, VESS said,adding that the existing tax policies on petroleum might no longer be suitablein the context of volatile world gasoline prices.
Economic expert Bui Trinh said that it was difficult to make acomparison between petroleum prices in Vietnam and other countries because eachcountry has a different economic model, different political structure,different consumption level and different levels of income per capita.
Thus, the management of the domestic petroleum market needed to beflexible, he said.
Bui Ngoc Bao, Chairman of the Vietnam Petroleum Association, saidthat domestic petroleum prices were dependent on global prices because Vietnamstill imports petroleum.
Bao said that it was not appropriate to compare the prices ofpetroleum with the country’s income per capita. He said that, similarly, pricesof automobiles in Vietnam were quire high although Vietnam was just adeveloping economy. Prices also depended on the country’s tax policies, hesaid.
Petroleum was currently subject to a special consumption tax in Vietnamas the Government aimed to encourage the use of public transport rather thanprivate vehicles, he said.
He said that the current percentage of taxes and fees in prices ofaround 30% was reasonable.
Improving the transparency of the petroleum market was alsoimportant to make petroleum prices more market-based and competitive.
A report of the National Assembly Economic Committee early thisyear said that the calculation of domestic petroleum retail prices was notsuitable to market fluctuations and lack of competition.
According to Pham Ngoc Hung, an industry insider, an exchangeshould be set up to decide the base price for gasoline based on the biddingprices of wholesalers to increase transparency and prevent a monopoly. Theexchange would also help deal with difficulties in petroleum reserves aswholesalers who wanted to participate in the bidding would be required to havewarehouses.
Do Huy Trung from the Vietnam Standard and Consumers Associationsaid that the frequency of reviewing and adjusting petroleum prices should beshortened to two times a week to timely reflect the market fluctuations andincrease transparency. Currently, petroleum prices were reviewed for adjustmentsevery 10 days./.
VNA
