Industry and Trade Ministry tosses fuel price ball back into Finance Ministry’s court

The industry ministry said in a draft decree that managing retail prices falls within the expertise of the finance ministry.

The finance ministry had been entrusted with the task until 2014, but since then it has been recommending prices to the industry ministry, which makes the final decision.

In October last year Ministry of Finance Ho Duc Phoc said his ministry wanted gasoline retail prices to be completely managed by the industry ministry.

His proposal came following complaints about “problematic” management of fuel prices by the two ministries in the second half of last year when there were shortages across the country.

Many lawmakers backed Phoc’s suggestion.

Also in its draft decree, the industry ministry said the fuel stabilization fund, set up to cushion strong fluctuations in global fuel prices, is necessary and should remain in place, but should be used only when prices drop by 7% or increase by 10%.

This would give the government control over fuel prices but give the market a bigger role, it said.

It proposed that fuel suppliers and distributors should respectively maintain stocks to cover at least 20 normal days of demand and five days to prevent shortages.