On November 1st, 2021, the Government enacted Decree No. 95/2021/ND-CP (hereinafter referred to as “Decree 95”), amending and supplementing several articles of Decree 83/2014/ND-CP on petrol and oil trading. Accordingly, some notable features of Decree 95 can be mentioned as follows:
a. Additional subjects having the right to determine the wholesale price of petrol and oil
Decree 95/2021/ND-CP has added that the subject who has the right to decide on the wholesale price is the distributor of petrol and oil. However, whenever increasing or decreasing the selling price of petrol and oil, these subjects must follow the general principle of petrol and oil price management that the selling price is made according to the market mechanism, under the management of the Government.
Based on the present condition of the enterprise, the trader and the distributor of petrol and oil shall decide on the retail price of petrol and oil (mazut oil is the wholesale price in particular) in their distribution system following the provisions of the law. Also, the price must be consistent with the actual costs incurred at the enterprise and not higher than the operating price announced by the competent state authority.
For areas that are far from ports, warehouses, petrol and oil production facilities, there are reasonable and valid (within the expenses audited) having actual expenses incurred lead to higher selling prices than operating price, the traders can decide the exact selling price in that area (notified to the Ministry of Industry and Trade) to comprise the incurred expenses but not exceed 2% of the operating price announced at the same time. The traders and distributors of petrol and oil are responsible for notifying the selling price to the Ministry of Industry and Trade and the Ministry of Finance right after deciding the enterprise’s petrol and oil selling price.
If the price of petroleum products has abnormal fluctuations, significantly affecting socio-economic development and people’s lives, the Ministry of Industry and Trade is responsible for reporting to the Prime Minister for consideration and appropriate time management of petrol prices.
b. Suspending of the sale in the event of force majeure
Previously, according to the provisions of Decree 83/2014/ND-CP, petrol and oil traders for petrol and oil retail stores only suspended selling after they were approved in writing by the Department of Industry and Trade. It means that petrol traders who suspend selling petrol and oil at retail stores need to be approved by the Department of Industry and Trade in all circumstances.
However, Decree 95/2021/ND-CP has added a case allowing petrol and oil traders for petrol and oil retail stores to suspend selling without being approved by the Department of Industry and Trade in the event of force majeure.
c. Regulatory period for petrol and oil prices
Regarding Decree 95, the time to operate the petrol prices on the 1st, 11th and 21st of every month. For the operating periods that coincide with a holiday or public holiday according to the regulations of the State, the operating time shall be postponed to the next working day after the holiday or public holiday. For the operating period that coincides with the Lunar New Year, the operating time is postponed to the following operating period.
Decree 95/2021/ND-CP takes effect from January 2nd, 2022.
Download the Legal update as a PDF here.
