Minister Nguyen Hong Dien proposed a roadmap to increase the total national oil reserves.
At the Petroleum Market Explanatory Session held by the Economic Committee of the National Assembly on February 28, Minister of Industry and Commerce Nguyen Hong Dien presented 7 groups of tasks and key solutions for the State Management of Gasoline, Oil.
He emphasized the work to increase national oil reserves. According to this, the Ministry of Industry and Trade has submitted a permit to the Prime Minister for approval four times in 2022. Most recently, on December 27, 2022, the ministry proposed increasing the national petroleum reserve from the current 9 days of net imports to 15 days from 2023 – 2025 and up to 30 days in 2026 – 2030.
In order to implement this plan, the state budget must allocate at least VND 4,100 billion/year for the purchase of oil reserves. “According to the Treasury Department’s report, the above funding level exceeds the ability to balance the state budget,” Mr. Dien said.
Currently, the state budget has allocated about VND1,500 billion/year for the purchase of goods for the entire national reserve industry.
In order to promptly adapt to the new situation, the Ministry of Industry and Trade and the Ministry of Finance met on February 17, 2023, reviewed and agreed to continue reporting to the Prime Minister for a gradual increase in national petroleum reserves according to the budget in to consider balance.
“If the relevant authorities permit, the state budget will arrange for the purchase of an additional 1,000-2,000 billion dongs each year, equivalent to 1-2 days of net imports, so that the total national petroleum reserves in 2025 reach the maximum level established under Decision No. 1030.” of 13 July 2017 by the Prime Minister,” added the Minister for Industry and Trade.
In many places there will be a local gasoline shortage in 2022.
In 2022, the Ministry of Industry and Trade has flexibly used the national petroleum reserve and gasoline price control time to ensure that domestic gasoline prices closely follow world gasoline price movements.
The ministry also urged and guided key enterprises and traders to actively distribute goods and strictly implement the assigned minimum import quota. At the same time, domestic gasoline and oil factories will be ordered to increase their maximum capacity and adjust production structure accordingly to increase supply.
However, the delegates who attended the explanation session pointed out many problems and shortcomings in the current regulations, which led to gasoline prices hitting a record high in the June 13 adjustment session. At that time, the selling price of gasoline was 95 RON up to 32,370 VND/litre.
In particular, delegates said that petroleum producing companies are entitled to specific mechanisms and guidelines but do not commit to minimum production levels; National Reserve Petroleum was not stored separately but continues to be stored at the Company’s trading facility; the price calculation method has not yet ensured competitiveness and market rules; The state administration of petroleum overlaps with the tasks of many ministries …
In particular, delegates wondered about the implementation of price stabilization, which fell short of the set target, and lacked publicity and transparency in the management and use of the fund. In addition, the determination of the world price in the basic price formula by forming the “average price” of the 10 days before the operating time as the “maximum price” for the next 10 days creates a phase difference between Vietnam and Vietnam World.
Deputy Chairman of the National Assembly Nguyen Duc Hai assessed that the session was timely.
Minister Dien further stated that the total supply of oil to the market in 2022 reached 25.58 million m3/ton, 7.3% more than the total allocated source. There, imports reached 8.87 million m3/ton, an increase of 27% over the previous year (representing 34% of the total supply); Domestic production reached 15.69 million m3/ton, up 13.7%.
Based on the market forecast for 2023, the Ministry of Industry and Trade has allocated the entire petroleum well to the enterprises at 27.34 million m3/ton, an increase of 15%. According to the industry and trade commander, being proactive and planning for early delivery will help stabilize gasoline prices this year.
Vice Chairman of the National Assembly Nguyen Duc Hai said at the explanation session that open minds would help remove difficulties and obstacles, promote the stability of the oil market while stabilizing the economy. business and people’s lives.
Mr Hai also suggested that the Ministry of Industry and Commerce, the Ministry of Finance and relevant ministries and branches should clearly define responsibilities and improve the coordination efficiency of state administrative agencies.
In order to make the domestic petroleum market healthy, the Ministry of Industry and Commerce established 3 inspection teams. As a result, in 2022 and early 2023, the Market Management Force oversaw more than 17,000 gasoline and oil retail stores nationwide, and inspected and investigated over 2,700 cases and processed over 600 cases, with a total of about VND20 billion in fines.