Finance Ministry prepares for volatile crude oil prices

Minister of Finance Dinh Tien Dung said that the ministry has built crude oil price scenarios at US$55, 50, 40, 35 and 30 a barrel to create a basis for the management of state budget estimates this year.
He made the statement on TV program ‘Residents ask, ministers answer’ last night.
Successfully implemented measures last year will be continued this year such as expense cut, tax collection policy adjustments to prevent revenue losses and tax arrears.
Experiences in price operation will be used for reducing input costs of the economy and businesses if petrol price plunges. This aims to improve the competitiveness of Vietnamese products creating conditions to boost economic growth.
That was the most important premise to increase budget revenue in the future, said Minister Dinh Tien Dung.
He also answered some queries that why the world’s oil price dropped 40 percent in 2015 but retailed gasoline price in local market reduced only 12 percent and oil price slid only 30 percent.
According to the ministry’s statistics crude oil costs account for 40-50 percent in retailed petrol price because there are other costs including processing, transport, storage and tax payment, he explained.
Therefore, the ratio of crude oil price reduction in the beginning of the year or month compared to its end could not appropriate with the ratio of retailed petrol price cut.
This year, the ministry will consistently manage petrol prices on market mechanism under the state management as per Decree 83 and regularly update the world’s oil prices, he affirmed.
Petrol price management will ensure more transparent information and intensify inspection over retailed prices as per the Government’s regulations, he added.

By Bao Minh – Translated by Hai Mien

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