The Vietnamese government's fund to maintain stable fuel prices lacks any legal basis for its existence, according to the recent findings of a parliamentary committee that tracks public opinion.
The committee also found that the program has proven largely ineffective.
The National Assembly People's Aspiration Committee said Friday that the public wanted the fund to be abolished because consumers have paid from VND300 to VND500 per liter for the fund since 2009 without enjoying any clear benefits from it.
The committee also said that there is no legal basis for the fund as Vietnam's price management regulations contain no provisions sanctioning such a reserve.
According to the Ministry of Finance, as of the end of July, local fuel traders set aside more than VND3.6 trillion from their revenues for the price stabilization fund. About VND1.05 trillion has been spent so far on the effort.
The ministry responded to the findings by insisting that the establishment of the fund was legitimate.
Some fuel traders are not supportive of the fund.
The Military Petroleum Company, for instance, said the fund aims to stabilize prices. However, while this goal has not been achieved, the fund has greatly benefited large companies.
Since each company is authorized to manage their own reserves, they can use the money to do business and thus reduce business loans. Large companies can, therefore, create a price advantage for themselves and dominate the market, the company claimed.