Fuel pricing disclosure fails to go far enough

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Petrolimex, the country's largest oil product importer, publicized its pricing data for the first time this week, but economists say the firm has still withheld some important figures.

Le Dang Doanh, former director of the Central Institute of Economic Management, said the move was praiseworthy, but there was not enough transparency.

For instance, components in the CIF (Cost, Insurance and Freight) price and how the operating expense was set at VND600 per liter were not disclosed, Doanh said.

The state-owned firm also failed to provide comparative figures from other fuel traders, making it difficult to judge whether Petrolimex's pricing is reasonable, he said.

Since December 15 last year, the government has allowed fuel traders to raise pump prices automatically without seeking government consent if world prices rise by seven percent or more.

Petrolimex said it wanted to announce input costs so that the public can monitor its prices.

Questionable data

According to the data released by Petrolimex Monday, the firm was incurring a loss of VND526 for every liter of gasoline. It also posted losses with all other fuel products, including diesel and kerosene.

The company said the price of A92 gasoline imported from Singapore, Vietnam's main fuel supplier, had stayed at US$86.3 per barrel over the past 30 days.  At this price it calculated the cost price of A92 gasoline at VND17,816 per liter. However, pump prices are now set at VND16,990, it said.

Economist Ngo Tri Long, former deputy head of the Market and Price Research Institute, said local consumers have no choice but to accept the publicized figures. Even if they want to check the data integrity, they can't, he said.

Still, it can be seen that there was a large gap between the import price of VND10,672 and the stated cost price of VND17,816 per liter, Long said.

It's necessary to check how much money the fuel trader actually earns from that gap and whether the earnings are rational, he said.

"As Petrolimex holds a majority 60 percent market share, the government needs to monitor its pricing," Long said.

Doanh said Petrolimex had calculated and analyzed its pricing structure on its own. Agencies such as the Vietnam Competition Authority and consumer associations must step in to check the prices, he said.

"As the company has announced a loss of VND526 per liter of A92 gasoline, the immediate question is: will there be another price hike? It's the big concern now."

Fuel traders last month increased gasoline pump prices by VND590 per liter, saying they'd suffered losses due to higher import prices. It was the second hike this year.

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