Fuel market cannot be regulated by administrative diktats
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The recent fuel shortages happened because retail prices did not follow the market economy principles, and the government cannot mandate prices, Prime Minister Pham Minh Chinh said.
“Businesses only operate if they gain profits. It is difficult for the government to use administrative measures with them in a market economy.”
He pointed out that calling on businesses to sacrifice their own interests for the nation could only be done during wartime, and authorities need to be flexible and keep up with the market.
“When retail prices correctly reflect costs, retailers started to sell again because they see profits.”
The government has instructed the Ministry of Industry and Trade to amend regulations to ensure demand and supply principles are followed.
Many localities, including Hanoi and Ho Chi Minh City, reported fuel shortages for weeks in October and early November as gas stations said they were selling at a loss since retail prices were too low.
The situation has improved in the last three weeks, with long queues no longer seen at filling stations.
State-owned fuel distributor Petrolimex said it is set to increase supply by 40% to 2,000 cubic meters daily.
Questions & Answers
Q.What caused the recent fuel shortages in places like Hanoi and Ho Chi Minh City?
What caused the recent fuel shortages in places like Hanoi and Ho Chi Minh City?
Fuel shortages occurred because retail prices did not align with market principles, meaning gas stations were selling at a loss. Retailers stopped selling when prices were too low, making it unprofitable for them to operate.
Q.What is the Prime Minister's view on the government's role in regulating fuel prices?
What is the Prime Minister's view on the government's role in regulating fuel prices?
The Prime Minister believes the government cannot mandate prices using administrative measures in a market economy. He stated businesses only operate if they gain profits, and authorities must be flexible and keep up with the market.
Q.How has the government responded to the issues raised about fuel market regulation?
How has the government responded to the issues raised about fuel market regulation?
The government has instructed the Ministry of Industry and Trade to amend regulations. This action aims to ensure that demand and supply principles are properly followed within the fuel market.
Q.What action is State-owned fuel distributor Petrolimex taking to address supply concerns?
What action is State-owned fuel distributor Petrolimex taking to address supply concerns?
Petrolimex plans to increase its daily supply by 40%, boosting it to 2,000 cubic meters. This measure aims to improve the availability of fuel following recent shortages.
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