The Saigon Times Daily
Nonetheless, a report by the online version of Tuoi Tre newspaper published last Saturday reveals that PV Oil, an oil products trading arm of Vietnam National Oil and Gas Group (PVN), had been behind a December 6 decision jointly issued by the ministries of industry-trade and finance to hike import tariffs on fuels by up to 10 percentage points.
The report says that just before the two ministries announced the tariff spike, PV Oil had written to the two ministries indicating that the requirement for fuel trading houses to store volumes of fuels enough to cover 30 days of distribution while world oil prices are in decline has eaten into their profits.
In the statement, PV Oil says that since August this year it had racked up losses. To support PV Oil and other fuel traders, it proposes the two ministries temporarily keep fuel retail prices at high levels by raising fuel import tariffs by 5-7 percentage points.
So when world oil prices edge higher, the tariffs would just be reverted to the previous levels or lowered a little to give fuel traders scope to hike retail prices. This practice would prevent the market from a sense of strong price volatility.
Bui Ngoc Bao, chairman of Petrolimex, the country’s leading fuel trading firm, throws support behind the fuel import tax hikes.
Fuel traders have to store fuel volumes sufficient for 30 days of sale, meaning they import fuels at higher prices but sell them at lower prices due to steady price cuts in line with global market movements. The 11 rounds of fuel price cuts this year have delivered a blow to traders, he reasons.
If this principle of reasoning applies to previous years when fuel prices kept rising, traders must have earned hefty profits because they import fuels at low prices but sold them at high prices due to the 30-day storage rule.
The chairman of Petrolimex even sounds hypocritical when saying he worries the State would lack money for social welfare if it did not raise fuel import tariffs.
This is the job of others, not for-profit businesses like Petrolimex.
Đăng ký: VietNam News
