In principle, prices in a market economy should reflect the relationship between supply and demand, costs, and competitiveness. Businesses with better sources of goods, more efficient logistics, and better cost management will be able to sell at more competitive prices. In this case, price becomes a signal reflecting business efficiency, rather than primarily being determined by an administrative formula. However, empowering businesses to set prices is only a necessary condition, not a sufficient one, for the formation of a competitive market.
It is worth noting that the structure of Vietnam's petroleum market remains relatively highly concentrated. According to data cited in the draft proposal, Petrolimex and PVOIL currently account for approximately 70%-75% of the retail market share.
Given the significant disparities in access to supply sources, warehousing, logistics, and distribution networks among businesses, removing price caps does not automatically create stronger competition. Therefore, the crucial question is not just who has the right to display prices, but whether all sellers are truly competing on a level playing field.
"Every gas station has a different price" - the same product but with different costs, businesses sell it at different prices; that's the logic of the market. Consumers can choose where the price is lower or the service is better. The problem arises when consumers lack information or don't have enough choices.
In large cities, people can easily choose from many stores. But in remote areas or places with only a few outlets, the right to set prices independently can create localized market power if there is a lack of proper oversight mechanisms.
Therefore, the shift to a market-based pricing mechanism must be accompanied by higher demands for data transparency. Prices at the store, at the fuel pump, on invoices, and the data that businesses declare to the regulatory authorities must be consistent. A sufficiently fast and transparent data system will help both regulatory agencies and consumers monitor price fluctuations, detect anomalies, and increase the ability to compare prices between different sales points.
This is all the more important because gasoline and oil are not ordinary commodities. Fluctuations in fuel prices directly impact transportation, logistics, production costs, and ultimately the overall price level of the economy. Therefore, reducing direct intervention in pricing does not mean reducing the role of the State.
Conversely, the management approach will have to shift from controlling a single price level to monitoring both the structure and behavior of the market: the degree of concentration, price composition, access to supply, the risk of collusion, abuse of dominant position, creation of artificial scarcity, or provision of misinformation.
The spirit of the reform can be summarized by three shifts: from direct state pricing to enterprise pricing; from pre-approval to post-approval; and from management primarily through administrative orders to management based on data and competition law .
Under normal circumstances, the market can determine prices, while the State ensures transparent and competitive rules of the game. When supply shocks or unusual fluctuations occur, the management system still needs to have sufficient capacity to use tax, fee, reserve, and supply regulation tools within the legal framework.
Empowering businesses to set prices is a necessary change, but its effectiveness depends on the level of competition and market oversight. If businesses are given the power to determine prices while the market lacks competition, consumers may not benefit as much as expected.
Therefore, along with changing the pricing mechanism, it is necessary to ensure transparent information, control the abuse of market position, and create more choices for buyers.
Source: https://www.sggp.org.vn/dinh-gia-xang-dau-song-hanh-with-canh-tranh-minh-bach-post874694.html
