CONCLUSION

The tension in supply, demand as well as fluctuations in petrol prices are very
important in Vietnam and around the world because it greatly affects the factors in
the economy. This article focuses on the current status of the petroleum market in
Vietnam, the petroleum monopoly in Vietnam - Petrolimex, analyzing the causes
and consequences and proposing solutions to the government on the issue of gasoline
prices in the market.
From the article, it can be seen in terms of price, market mechanism and monopoly
mechanism create two opposing trends. In the competitive environment, applying
the market mechanism, enterprises do not set prices properly, they will destroy their
competitiveness to ensure their existence. Meanwhile, with a monopoly mechanism,
enterprises have the right to impose from production to the price that consumers
must accept. It also allows monopolies to squeeze prices of other investors. With the
monopoly industry structure when an external factor impacts on, the power of
appreciation of an amplifier is much greater than the actual impact in the market
mechanism.
Therefore, in general, the petroleum market in Vietnam is facing many
shortcomings. From the fact that the market is in deficit, the price fluctuates and
tends to increase, the oligopoly market puts pressure on many components of the
economy. It can be said that monopoly in petroleum business is a non-optimal
market structure for society. It makes the market operate inefficiently, social
resources are not distributed optimally, making society suffer. However, there is no
denying the benefits of petroleum monopoly in developing the country as an
advantage in large scale production, in terms of centralized investment efficiency
and national energy security. In addition to these positive aspects, we can see the
limitations and harms of the abuse of monopoly on the economy, notably increasing
the price of gasoline.
Therefore, the state should take measures to improve its own tax, price and subsidy
interventions as well as appropriate management methods to stabilize the domestic
petroleum market, thus contribute to ensuring social security and sustainable growth.
Propose key solutions to the government:
 Separate of business functions from ministries and branches; implement
centralized management under one center
 Improve the quota management mechanism
- Quotas are only allocated to those enterprises which have sufficient material
facilities to receive large shipments of 30,000 tons or more. Focusing on large-scale
businesses with a scale of over 50,000 tons.
- Allocate quota by democratic way and public bidding
- Have the regime of binding and sanctioned when enterprises fail to carry out the
import the quota as allocated and the committed process
 Improve the investment management mechanism
- Planning the system of petroleum port warehouses, general depots, centers,
strategically located
- There should be a specialized agency responsible for granting investment licenses
for the construction of boiled petroleum projects.
 Improve the mechanism of price, tax and subsidy policy
- Tax policies:
+ Should not raise taxes massively
Petroleum is essential commodity, so the price increase for petrol does not affect the
total consumption of consumers. In other words, if the policy objective to limit the
environmental impact by limiting petroleum consumption, the tax increase does not
bring about significant effects. Instead, the government needs to reform the tax
system in a manner consistent with the orientation of state budget restructuring and
the integration trend is one of the priorities of the Ministry of Finance.
+ Change the purpose of the petroleum import tax as the main source of revenue for
the state budget to promote production and consumption orientation.
+ Provide a price bracket (FOB or CIF) of several prices (based on some criteria
such as world price, time of execution, number of imports per batch ...) for each item
and the corresponding rates are the import duties payable.
+ Direct tax calculation
The Ministry of Finance should publicize import tariffs and charges related to petrol
and oil products. Tariffs will be set based on fluctuations in world oil prices, for
example when the price of oil at $ 50-70 per barrel, the import tax is 10%, if at 80-
90 per barrel of import tax decreases to 8%
- Pricing policies:
Keep petroleum prices to avoid surging, surpassing the overall balance of the
national economy.
+ Enhance price management by ceiling price
The government still has to control prices by the ceiling price with the import price
of the next 15 days to calculate the base price. The current practice is still limited,
subjective, affected by some factors outside the market supply - demand when the
time to calculate the price is too far, domestic prices sometimes does not resemble
the world price because of the use of the stabilization fund.
+ The government also needs to incorporate a policy of reducing production costs
through the issuance of standards for petroleum loss and reduction of input costs in
the importation process, store, transport, wholesale, retail, etc. in line with new
technological advances
+ Encourage the reduction of import tariff by: long-term contracting, encourage FOB
buying, large cargo capacity.
+ Reduce the cost of wholesale by: building upstream storage in each area, setting
up new waste and depletion norms suitable to each level of imported input.
+ Reduce retail costs by: building new freight losses instead of regulation 758,
building new standards of loss in retail, improve management regulations of agents.
- Subsidy policy
Appropriately use the Price Stabilization Fund: Only use that fund when world prices
increase makes base prices higher than current prices and the State requires
enterprises to implement price stabilization; to curb price increase or not increase
the selling price, then at the same time with other financial instruments (flexible
administration of import tax), the Ministry of Trade has the official dispatch to
enterprises to use the fund. The use of the fund is not fixed but depends on the
difference between the base price and the current selling price; economic and social
situation in the country.
 Complete the legal corridor: Strictly punish the violation of business ethics
such as cheating, smuggling, steal.