The country should revise Decree 83 on petrol trading, especially regulations related to the calculation of output prices to ensure a transparent petroleum market, said Do Hoang Anh Tuan, Deputy Minister of Finance Ministry.

Tuan said Viet Nam may be the only country in the world still be calculating petrol prices based on the weighted average of import taxes, a price stabilisation mechanism and discount rates.

He said the current method was outdated and that the local petrol market had been developed without adequate strategies and orientation for sustainable growth. The number of petrol traders was high but mostly on a small scale.

This was the reason that the country needed an adequate legal framework as a basis to build a market strategy.

Deputy Minister of Industry and Trade Tran Quoc Khanh agreed, saying that the calculation is not transparent, making it difficult for traders to follow.

He said the domestic petrol market should have strategies in addition to financial, tax and customs management tools for sustainable development.

“We need a legal framework as a foundation for the market’s development,” he added.

The calculation by a weighted average of the tariffs has been applied as base price since March 2016 and adjusted every quarter.

The calculation at that time was suitable as Viet Nam was dominated by trade commitments with many regions and countries.

According to the calculation, the weighted average of the tariffs depends on output and import tax from South Korea (10 per cent), ASEAN (20 per cent) and the refined oil rate of the Dung Quat refinery.

Prof Ngo Tri Long told online newspaper vnexpress.vn that the biggest shortcoming in Decree 83 was price calculation by the weighted average of the tariffs.

Long said taxes were used to calculate the base price. If the weighted average of the tariffs was 10 per cent and traders imported at 20 per cent, they would suffer losses.

In the latest price adjustment on September 26, according to the Finance Ministry’s calculation, the weighted average of the tariffs in the third quarter was 10 per cent. — VNS