The petrol price stability fund must still be maintained

DNHN - The Government submitted a proposed updated Price Law to the National Assembly Standing Committee on September 19, which still retains the fuel price stability fund.

According to the draft law provided by Finance Minister Ho Duc Phuc, the Government requested to keep the Petroleum Price Stabilization Fund (QBO) since it is critical to controlling gasoline prices in the nation. This is to assure practicality, avoid arising situations of commodities and services on the list of stabilization, and solely to build a fund, which is also a legal foundation for continuing to maintain the Petroleum Price Stabilization Fund's tool.

According to Nguyen Phu Cuong, Chairman of the Finance - Budget Committee, the majority of the Standing Committee of this Committee agree with the Government's plan. The verification agency acknowledged the Stabilization Fund as one of the measures used to control domestic gasoline prices, seeing it as an economic measure rather than an administrative intervention.

Previously, when engaging with this law, the Ministry of Finance - the body that created the updated Price Bill - advocated abolishing the Petroleum Stabilization Fund. Businesses and professionals have repeatedly suggested that this fund be terminated.

It is advised that the Petroleum Stabilization Fund not be maintained since it is a financial fund that is not in the state budget balance and the source of creation is the purchase price paid by customers (300 VND per litre). The primary petroleum trading firm must create a separate account at a bank to record revenues and expenditures linked to this fund, and it is responsible for advertising and transparently collecting and spending fund income and expenditures.

This point of view also said that, if it is essential to restrict gasoline prices, the government can use other methods, such as taxes and levies, or adopt measures to directly assist the poor, who are disproportionately affected by rising fuel costs.

Further clarifying, Finance Minister Ho Duc Phuc added that the rationale for proposing to preserve the Fund is that, based on prior effect assessments, the Fund has had a favourable impact and tremendous advantages, particularly during the 2022 oil price volatility.

He underlined that while this is a good tool, it can only be done in the short term by depending on tax and fee reductions, and it is extremely difficult in the long run.

Ngoc Phi