Finance ministry says can't loosen grip on fuel prices

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The Ministry of Finance on Thursday said it has interfered in the pricing of fuel products since the market is still dominated by state-owned Petrolimex.

As there is no real competition in the fuel market, the ministry has to step in to ensure stability, Minister Do Hoang Anh Tuan told the press.

"Petrolimex holds a 63 percent market share so the government needs to manage prices and gradually reduce that share," he said.

While Tuan described the interference as "temporary," he noted that it could stay until the monopoly no longer exists. "Fuel is an essential product that can affect the whole economy, so it can't be left unsupervised," he added.

The Ministry of Finance on July 3 raised import taxes on some petroleum products by 2 percentage points, the fifth tariff hike this year. The tax rate on gasoline now stands at 12 percent.

The increase came right after the ministry cut retail prices on petroleum, with the price of 92-RON gasoline, the most common grade of fuel in Vietnam, reduced by VND600 to VND20,600 a liter.

Tuan said he has been informed of allegations that Petrolimex tried to dodge the tax increase by declaring its fuel imports to customs in advance, saving as much as VND64 billion in taxes.

He said businesses are allowed to begin the customs registration process up to 15 days prior to the date they receive their goods. However, authorities will look into the case to check for violations.

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