Petroleum businesses may charge a maximum rate of 20%, as suggested.

The Ministry of Industry and Trade is proposing a new decree to regulate gasoline prices, suggesting that businesses calculate their own retail prices based on the 7-day average world price announced by the State. This draft replaces previous decrees on petroleum business and was consulted by the Ministry from April 1, following the first draft.

Under current regulations, the State sets a base price for retail gasoline prices. This base price serves as a ceiling for businesses to determine their own retail prices within the system. However, this process requires businesses to wait for the base price announcement from the State management agency before setting their prices, leading to a lack of market-driven pricing.

The Ministry of Industry and Trade believes that the current mechanism for managing gasoline prices does not align with market principles. As a result, they are proposing that the State not regulate gasoline prices but instead announce the average world price and certain fixed costs. Businesses can then calculate their maximum selling price based on these factors and their own expenses and profit norms, with the retail price to consumers not exceeding this maximum level.

The draft offers two options for businesses to calculate their costs and profit norms. Option 1 involves adding a fixed amount to the retail price, while Option 2 adjusts the percentage based on fluctuations in world gasoline prices. The Ministry believes that allowing businesses to set their own prices will promote a competitive environment for gasoline pricing and help traders and regulators avoid the periodic calculation and publication of costs.

Additionally, the draft includes regulations related to the Price Stabilization Fund and warehouse use, aiming to maintain the stability of the fund and ensure efficient distribution practices. The Ministry will also monitor changes in costs and profits of enterprises and report any significant increases to the Prime Minister for consideration and adjustment.

Overall, the proposed decree aims to streamline the process of setting gasoline prices, promote competition in the market, and ensure transparent and efficient pricing practices within the industry.

By Samantha Robertson

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