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

Fostering Market-Driven Gasoline Pricing: New Decree Proposed by the Ministry of Industry and Trade

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. 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 this mechanism does not align with market principles.

The proposed decree aims to streamline the process of setting gasoline prices by allowing businesses to set their own retail prices based on market forces. Businesses will be required to calculate their maximum selling price based on the average world price and certain fixed costs, 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 competition in the market and help traders and regulators avoid periodic calculations and publications of costs.

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

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