Recalculating base fuel retail prices and granting retailers a minimum bonus were among a number of suggestions made by the Ministry of Planning and Investment (MPI) as measures to put a stop to fuel retail disruption, as seen last year and earlier this year, across the country.

"The underlying cause behind disruptions in the domestic fuel market in recent months could be attributed to an inadequate calculation of the base fuel retail prices, which have resulted in retailers voicing concerns over prolonged financial losses and hurt their incentives to push sales," said the ministry in a public statement.

The ministry advocated for the current fuel management system but stressed the importance of implementing a revised calculation of retail prices, which should cover most, if not all, costs incurred by retailers' operations.

Meanwhile, reviews must be conducted on fees shouldered by retailers and how often they must pay them. The goal, according to the ministry, is to reach a balance among all of the sector's stakeholders.

In addition, the ministry supported establishing a minimum bonus regime for retailers, to serve as an incentive for sales, which aims at letting the market sort out supply and demand issues and to lessen the central government's role in it.

Retailers bear most of the responsibility in the distribution and quality of fuel and should be held accountable in the events of accidents and malfeasance, said the ministry. Having multiple suppliers, given the nature of the merchandise, will likely make it difficult for governmental agencies to enforce quality control measures.

"However, having only one supplier may also lead to difficulties in ensuring supply on retailers' part, especially during supply shortage as seen in previous months," said the ministry.

MPI, therefore, suggested that the Ministry of Industry and Trade develop measures to allow retailers to purchase from multiple suppliers while implementing stronger product origin regulations.

Regarding the country's fuel stabilisation fund, the MPI supported the continuation of the fund but stressed the central government should only intervene in the event fuel price fluctuate enormously within a 7-10 per cent margin.

According to the General Department of Vietnam Customs, the Southeast Asian country imported more than 1 million cubic metres of fuel in January alone, a 9 per cent increase compared to December 2022.

Imported fuel's average price was estimated at US$889 per cubic metre in January, a $17 hike from December 2022 and a 21 per cent increase from the same period last year.

The country imported nearly 9 million cubic metres throughout 2022, paying $9 billion, a 28 per cent increase in quantity and a 220 per cent increase in value compared to the year 2021. The average fuel price for 2022 was estimated at $1,007 per cubic metre, a 67 per cent increase from the same figure of the previous year. — VNS