The price stabilisation funds from the Ministry of Industry and Trade and the Ministry of Finance helped cushion the local oil market against the pressure that forced global prices into a nosedive.
|The crude oil price in the global market also recorded a drop of 30 per cent
The Ministry of Industry and Trade (MoIT) and the Ministry of Finance on March 15 decided reduce oil prices. A litre of E5 RON92 and RON95 dropped by VND2,290 (9.9 US cents) and VND2,315 (10 US cents) to VND16,050 (70 US Cents) and VND16,810 (73 US cents), the lowest rate since July 2017.
Meanwhile, the price of crude oil in the global market also recorded a drop of 30 per cent. Last week, Brent lost 25 per cent – the heaviest fall since 2008 – after the Organisation of Petroleum Exporting Countries (OPEC) and Russia failed to reach an agreement on the price of oil.
“If the ministries did not allocate funds for price stabilisation, gasoline would be down about VND3,000 (13 US cents) per litre,” said Ma Duc Tu, director of Thu Duc Trading and Import-Export JSC.
Specifically, authorities used the fund to subsidise every litre of E5 RON92 and RON95 with VND200 (0.9 US cents) and VND800 (3.5 US cents), respectively.
Furthermore, according to Tran Duy Dong, head of the Domestic Markets Department under the MoIT, Decree 83 on gasoline business stipulates that state management agencies can adjust petrol and oil retail prices every 15 days. Also, the agencies have to prepare for a potential rebound in prices.
“The global political tensions have grown more complicated. If Russia and the OPEC reach a common voice, the petroleum price may bounce back by 30-40 per cent, and Vietnam needs to prepare for this,” said Dong.
According to the MoIT, in the past 15 days, the Singaporean market saw a great plung in price, with occasional hikes, for instance when the US announced purchasing crude oil for the National Reserve. Following this example, it is necessary to set up plans for similar contingencies, too.
The ministry also stated that with the decline of $12-13 per barrel since February 29, RON92 and RON95 cost $48.7 and $50.35 per barrel.