The average retail gasoline price in Vietnam in August was at $1.18 per liter, cheaper than 109 countries worldwide, including many regional countries, according to the Vietnam Petroleum Association (VINPA).
However, the price was more expensive than 32 countries, many of which are oil-producing nations and economic powers such as the US and Russia, said VINPA, citing a report from mytravelcost.com.
The price of gasoline in the US in August was at $0.94 per liter, and $1.06 per liter in Russia.
In the developed world, like Canada, Japan, the UK, Germany, the price was at $ 1.26 per liter, $1.59 per liter, $2.13 per liter, and $2.17 per liter, respectively.
The cheaper retail price, less than $0.5 per liter, was seen in oil-rich nations like Venezuela, Iran, Saudi Arabia, Qatar, and Brunei.
Compared to countries in the region, especially neighboring countries, Vietnam's gas price was much cheaper in August, said VINPA.
For example, gasoline price in the Philippines, Thailand, Cambodia and Laos was at $1.2 per liter, $1.26 per liter, $1.43 per liter and $1.57 per liter, respectively.
The price in China and Hong Kong was at $1.65 per liter and $2.13 per liter, and that in Singapore is the same at the China’s price.
However, the pricing mechanisms in those countries are much different than in Vietnam.
For example, according to VINPA, in Cambodia there are 12 private fuel importers and businesses which are operating in a competitive market, in which the state manages by law, tax and fee rates only.
Cambodian enterprises can decide the retail prices but are responsible to report to the Ministry of Commerce on the day before the retail price adjustment.
However, not all businesses complied with that as they tend to increase and decrease the price very fast, even 2 times a day.
In China, the price of oil is set by the National Economic Development and Reform Commission (NDRC) - the top economic planning of the country. NDRC set the wholesale price caps to control the retail prices of crude oil and petroleum products.
From March 26, 2013, the price is determined based on the tracking system of Brent, Dubai and Cinta crude oil prices in 10 consecutive days, down from 22 days as previously done.
The new mechanism is said to allow pricing liberalization while ensuring the price in the domestic market become less volatile. According to a reform plan of NDRC, the Chinese government will also give the local companies the right to freely set the retail prices.
Currently an average ceiling price of gasoline in China is $4.12 per gallon, or some VND22,500 dong per liter. In this country, the ceiling retail fuel prices are set for each province/city, the highest in the metropolis centers of Beijing and Shanghai.
Vietnam is running nearly the same mechanism as in China, but the tracking period last up to 30 days in accordance with Decree No.84, said Vo Van Quyen, director of Domestic Market Department under the Ministry of Industry and Trade.
According to Quyen, adjusting the local retail prices following market mechanism does not mean that the price must strictly track the world price.
“The decree on fuel market management never relinquishes the management of the State", he said.
“The decree aims at creating an environment of healthy competition for the next 5-10 years with a number of sound fuel businesses, and the state will then gradually withdraw from intervening in the market.”