Circular No. 104/2021/TT-BTC guides the method for determining factors constituting the basic price formula for petroleum products.

CIRCULAR
Guidelines for determining factors constituting the base price formula for gasoline and diesel
in the base price formula for petroleum products

Pursuant to the Law on Prices No. 11/2012/QH13 dated June 20, 2012;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to the Government Decree No. 83/2014/NĐ-CP dated September 3, 2014 on trading in gasoline and diesel; and the Government Decree No. 95/2021/NĐ-CP dated November 1, 2021 amending and supplementing certain articles of the Government Decree No. 83/2014/NĐ-CP dated September 3, 2014 on trading in gasoline and diesel;

The Minister of Finance issues this Circular guiding the method for determining factors constituting the base price formula for gasoline and diesel.

Article 1. Scope of Regulation and Applicability

Article 1. This Circular guides the method for determining factors constituting the base price formula for gasoline and diesel as prescribed in Article 1 of the Government Decree No. 95/2021/NĐ-CP dated November 1, 2021 amending and supplementing certain articles of the Government Decree No. 83/2014/NĐ-CP dated September 3, 2014 on trading in gasoline and diesel (hereinafter referred to as the Government Decree No. 95/2021/NĐ-CP).

The factors constituting the base price formula for gasoline and diesel prescribed in this Circular shall only be valid for calculating the base price of gasoline and diesel as stipulated in Article 1 of the Government Decree No. 95/2021/NĐ-CP, including: Price of fuel ethanol; Volume ratio of unleaded gasoline, volume ratio of fuel ethanol; Exchange rate for converting world market prices of gasoline and diesel; Import tax costs; Special consumption tax costs; Costs of bringing gasoline and diesel from abroad to Vietnamese ports, costs of bringing gasoline and diesel from domestic refineries to ports, domestic premium; Trading costs at a fixed level; Profit margin; Weighted percentage of domestic production and imported volumes for calculating the base price of gasoline and diesel products.

Article 2. This Circular applies to agencies authorized to manage domestic gasoline and diesel selling prices and other related agencies; principal traders of gasoline and diesel and principal producers of gasoline and diesel as prescribed in the Government Decree No. 95/2021/NĐ-CP.

Article 2. Principles for establishing and adjusting factors constituting the base price formula for gasoline and diesel

Clause 1. Factors constituting the base price formula for gasoline and diesel shall be established based on current relevant laws, results of data compilation from principal traders, and actual business conditions of gasoline and diesel trading during each period.

Clause 2. Fixed cost items in the base price formula for gasoline and diesel are maximum aggregated costs reviewed, evaluated, and established based on the following sources of data:

a. Data on costs of bringing gasoline and diesel from abroad to Vietnam, domestic premium, and costs of bringing gasoline and diesel from domestic refineries to ports (if applicable), trading costs at a fixed level reported by principal traders of gasoline and diesel according to Article 1 of the Government Decree No. 95/2021/NĐ-CP and this Circular; Aggregated data from surveys and evaluations of actual costs conducted by the Ministry of Finance at representative principal traders of gasoline and diesel with significant total consumption volumes (if applicable).

b. Collection and aggregation of data are carried out based on reports from representative principal traders of gasoline and diesel with total consumption volumes accounting for over 70% of national consumption volumes. Principal traders of gasoline and diesel bear full responsibility for the accuracy of the data reported to competent state authorities as prescribed.

Clause 3. Costs of bringing gasoline and diesel from abroad to Vietnamese ports, domestic premium, and costs of bringing gasoline and diesel from domestic refineries to ports (if applicable), fixed trading costs shall be reviewed, evaluated, and adjusted periodically every six months and annually corresponding to each cost item as stipulated in Article 1 of the Government Decree No. 95/2021/NĐ-CP and this Circular.

In case actual reasonable and legitimate costs fluctuate abnormally due to objective factors affecting the business operations of entities, upon request from agencies, organizations, or individuals (if any), the Ministry of Finance (Price Management Department) shall issue a document requesting principal traders of gasoline and diesel to report actual incurred costs at their units. Based on this, the Ministry of Finance will evaluate and coordinate with the Ministry of Industry and Trade to adjust accordingly.

Principal traders of gasoline and diesel have the responsibility to monitor, grasp, and assess the actual implementation situation at their units, promptly report to the Ministry of Finance and the Ministry of Industry and Trade to have a basis for appropriate adjustments as prescribed; they are responsible for their own reports.

Article 3. Import duty expenses on gasoline and diesel oil

1. The import duty expenses on gasoline and diesel oil under this Circular shall only be valid for calculating the base price of gasoline and diesel oil as prescribed in Article 1 of Decree No. 95/2021/NĐ-CP. This expense is determined by multiplying the average weighted import duty rate (%) by {the world price of gasoline and diesel oil multiplied by the foreign exchange rate plus the cost of bringing gasoline and diesel oil from abroad to Vietnamese ports}. In which:

a. The average weighted import duty rate (%) equals {the import duty rate₁ multiplied by the corresponding volume of imported gasoline and diesel oil at the import duty rate₁ plus the import duty rate₂ multiplied by the corresponding volume of imported gasoline and diesel oil at the import duty rate₂ plus ... plus the import duty rateₙ multiplied by the corresponding volume of imported gasoline and diesel oil at the import duty rateₙ} divided by the total volume of imported gasoline and diesel oil during the period. In which:

The import duty rates on gasoline and diesel oil are determined based on the import duty rates specified according to statistics from customs authorities.

In cases where the volume of imported gasoline and diesel oil recorded at the time of customs declaration is recorded as a debit against the Certificate of Origin, the import duty rate included in the calculation is the preferential import duty rate.

The volume of imported gasoline and diesel oil is determined according to periodic statistics from customs authorities within the period from the 21st day of the month immediately preceding the first month of the quarter to the 20th day of the last month of the quarter, including the volume of imported refined petroleum products by trading enterprises (including both imported volumes from abroad and imported volumes from bonded warehouses; excluding solvents and aviation fuel).

b. The foreign exchange rate for converting the world price of gasoline and diesel oil to calculate the import duty expenses in the base price formula shall be implemented in accordance with Clause 9, Article 1 of Decree No. 59/2018/NĐ-CP dated April 20, 2018 of the Government amending and supplementing certain provisions of Decree No. 08/2015/NĐ-CP dated January 21, 2015 of the Government detailing and guiding the implementation of the Law on Customs regarding customs procedures, inspection, supervision, and control, and any subsequent amendments, supplements, or replacements thereof.

2. Quarterly, no later than the last day of the last month of the quarter (in case it coincides with a public holiday, it will be postponed to the next working day), the Ministry of Finance shall notify the average weighted import duty rate on gasoline and diesel oil for the Ministry of Industry and Trade to determine the import duty expenses applicable in the base price formula.

Article 4. Special consumption tax expenses

1. The special consumption tax expenses under this Circular shall only be valid for calculating the base price of gasoline and diesel oil as prescribed in Article 1 of Decree No. 95/2021/NĐ-CP. This expense is determined based on the taxable value of the special consumption tax multiplied by the special consumption tax rate (%) as prescribed in Article 1 of Decree No. 95/2021/NĐ-CP. In which:

a) The special consumption tax rate is determined according to the current legal regulations on special consumption tax.

b) The taxable value of the special consumption tax under this Circular is only valid for calculating the base price of gasoline and diesel oil and is determined as follows:

The taxable value of the special consumption tax in the formula for calculating the price of domestically produced gasoline and diesel oil is equal to the world price of gasoline and diesel oil multiplied by the foreign exchange rate plus or minus domestic premium.

The taxable value of the special consumption tax in the formula for calculating the price of imported gasoline and diesel oil is equal to the world price of gasoline and diesel oil multiplied by the foreign exchange rate plus the cost of bringing gasoline from abroad to Vietnamese ports plus the import duty expenses plus a percentage multiplied by (standard business costs + standard profit) plus the amount set aside for the Price Stabilization Fund (if any).

The taxable value of the special consumption tax for calculating the base price of biofuel is equal to the percentage of gasoline volume (%) multiplied by [{the world price of gasoline multiplied by the foreign exchange rate plus the cost of bringing gasoline from abroad to Vietnamese ports plus the import duty expenses} multiplied by the percentage of imported gasoline volume plus {the world price of gasoline multiplied by the foreign exchange rate plus domestic premium plus the cost of bringing gasoline from domestic refineries to ports (if any)} multiplied by the percentage of domestically produced gasoline volume] plus the percentage of ethanol fuel volume (%) multiplied by the price of ethanol fuel plus a percentage multiplied by (standard business costs + standard profit) plus the amount set aside for the Price Stabilization Fund (if any).

2. Based on the specialized report on the business costs of gasoline and diesel oil by trading enterprises as stipulated in Article 7 of this Circular; before July 1 each year, the Ministry of Finance reviews and announces the percentage of (standard business costs + standard profit) (if any) for the Ministry of Industry and Trade to apply and calculate the taxable value of the special consumption tax in the base price formula.

3. The foreign exchange rate for converting the world price of gasoline and diesel oil to calculate the special consumption tax expenses in the base price shall be implemented in accordance with Clause 9, Article 1 of Decree No. 59/2018/NĐ-CP dated April 20, 2018 of the Government amending and supplementing certain provisions of Decree No. 08/2015/NĐ-CP dated January 21, 2015 of the Government detailing and guiding the implementation of the Law on Customs regarding customs procedures, inspection, supervision, and control, and any subsequent amendments, supplements, or replacements thereof.

Article 5. Costs for bringing petroleum products from abroad to Vietnamese ports

Clause 1. The costs for bringing petroleum products from abroad to Vietnamese ports shall only be valid for calculating the base price of petroleum products in accordance with Article 1 of Decree No. 95/2021/NĐ-CP. These costs are determined based on the weighted average method according to the volume of imported petroleum products by petroleum product trading and distribution enterprises.

Point a. The costs for bringing petroleum products from abroad to Vietnamese ports include premium, insurance costs, transportation costs for petroleum products from abroad or from bonded warehouses to Vietnamese ports, and other incidental costs (if any).

Point b. Annually, before June 21 and December 21, petroleum product trading and distribution enterprises are responsible for submitting reports on the results of reviewing the costs for bringing petroleum products from abroad to Vietnamese ports according to Model 01 attached to this Circular to the Ministry of Finance (Price Management Department). The data collection period for the report due on June 21 is from December 1 of the previous year to May 31 of the reporting year. The data collection period for the report due on December 21 is from June 1 to November 30 of the reporting year.

Clause 2. Based on the reports on the costs for bringing petroleum products from abroad to Vietnamese ports submitted by petroleum product trading and distribution enterprises, the Ministry of Finance (Price Management Department) will aggregate, review, evaluate, and if necessary, request additional reports and conduct field surveys to gather more information.

Annually, on January 10 and July 10 (in case these dates coincide with public holidays, they are postponed to the next working day), the Ministry of Finance will announce the costs for bringing petroleum products from abroad to Vietnamese ports for the Ministry of Industry and Trade to apply and calculate the base price. In case of sudden changes in costs due to external factors (increase or decrease), based on proposals from agencies, organizations, or individuals (if any), the Ministry of Finance (Price Management Department) will issue a document requesting petroleum product trading and distribution enterprises to report actual costs incurred at their units. On this basis, the Ministry of Finance will assess and coordinate with the Ministry of Industry and Trade to consider and decide on adjusting these costs appropriately.

Article 6. Domestic premium and costs for bringing petroleum products from domestic refineries to ports (if applicable) for calculating prices of petroleum products from domestic production sources

Clause 1. Domestic premium shall only be valid for calculating the prices of petroleum products from domestic production sources in the base price formula in accordance with Article 1 of Decree No. 95/2021/NĐ-CP. This cost is determined based on the weighted average method according to the volume of petroleum products purchased by petroleum product trading and distribution enterprises from petroleum product production trading enterprises or from businesses assigned the exclusive sales rights for all petroleum products from domestic refineries during the calculation period.

The domestic premium included in the calculation of the price of petroleum products from domestic production sources shall not exceed the world average price multiplied by the lowest preferential import tariff rate for petroleum products committed under international agreements (in cases where the lowest preferential import tariff rate for petroleum products is greater than 0%). The world average price used as a basis for comparison is determined based on the weighted average of the actual world market prices of petroleum products traded by petroleum product trading and distribution enterprises during the calculation period.

Clause 2. The costs for bringing petroleum products from domestic refineries to ports (if applicable) shall only be valid for calculating the base price in accordance with Article 1 of Decree No. 95/2021/NĐ-CP. This cost is determined based on the weighted average method according to the volume.

The costs for bringing petroleum products from domestic refineries to ports include incidental costs incurred during the transportation process of petroleum products by petroleum product trading and distribution enterprises from domestic refineries to special sea ports and Class I sea ports as stipulated in the Vietnam Maritime Code, guiding regulations of the Vietnam Maritime Code, and any amendments or supplements thereto (if any); including insurance costs, transportation costs, loss costs, and other costs (if any); excluding: storage costs, demurrage costs, and incidental costs for hiring additional transportation means to transport petroleum products to warehouses located at sea ports.

Clause 3. Annually, before June 21 and December 21, petroleum product trading and distribution enterprises are responsible for submitting consolidated reports on domestic premiums and costs for bringing petroleum products from domestic refineries to ports (if applicable) according to Model 02 attached to this Circular to the Ministry of Finance (Price Management Department). The data collection period for the report due on June 21 is from December 1 of the previous year to May 31 of the reporting year. The data collection period for the report due on December 21 is from June 1 to November 30 of the reporting year.

Clause 4. Based on the reports from petroleum product trading and distribution enterprises, the Ministry of Finance (Price Management Department) will aggregate, review, evaluate, and if necessary, request additional reports and conduct field surveys to gather more information.

Annually, on January 10 and July 10 (in case these dates coincide with public holidays, they are postponed to the next working day), the Ministry of Finance will announce domestic premiums and costs for bringing petroleum products from domestic refineries to ports (if applicable) for the Ministry of Industry and Trade to apply and calculate the base price. In case of sudden changes in costs due to external factors (increase or decrease), based on proposals from agencies, organizations, or individuals (if any), the Ministry of Finance (Price Management Department) will issue a document requesting petroleum product trading and distribution enterprises to report actual costs incurred at their units. On this basis, the Ministry of Finance will assess and coordinate with the Ministry of Industry and Trade to consider and decide on adjusting these costs appropriately.

Article 7. Standardized business fuel costs

1. Standardized business fuel costs refer to the maximum aggregate cost only having value for calculating the base price of fuels according to the provisions of Article 1 of Decree No. 95/2021/NĐ-CP. The standardized business fuel costs include domestic fuel circulation costs (wholesale costs, retail costs at actual temperature) of key traders in the fuel market (including costs allocated to distributors, retailers, general agents, and agents of fuels) to calculate the base price at the maximum level. Standardized business fuel costs are determined based on the actual cost reports of key traders in the fuel market. Among them:

For gasoline types and diesel oil types, it includes wholesale and retail costs; for bitumen types, it only includes wholesale costs.

The volume of fuels included in the calculation is the actual consumption volume in kilograms or liters within the reporting period.

2. Before March 31 each year, key traders in the fuel market have the responsibility to submit specialized reports to the Ministry of Finance (Price Management Department) and the Ministry of Industry and Trade (Domestic Market Department):

A specialized audit report on business fuel costs;

A report on remuneration costs for agents, general agents, distributors, and other customers (if any) for retailing fuels;

A report on the detailed volume of imported, sold, and stored fuels by type.

3. Based on the reports from key traders in the fuel market, the Ministry of Finance (Price Management Department) will consolidate, review, evaluate, and if necessary, request additional reports and conduct field surveys to gather more information.

Annually before July 1, the Ministry of Finance will announce the standardized business costs for the Ministry of Industry and Trade to apply and calculate in the base price formula for fuels. In cases where actual reasonable and valid costs fluctuate abnormally due to external factors affecting business operations, based on proposals from relevant agencies, organizations, or individuals (if any), the Ministry of Finance (Price Management Department) will issue a document requesting key traders in the fuel market to report actual costs incurred at their units. On this basis, the Ministry of Finance will assess and coordinate with the Ministry of Industry and Trade to consider and adjust accordingly.

Article 8. Foreign exchange rate for converting world fuel prices; Volume ratio of unleaded gasoline, ethanol fuel ratio for calculating the base price of biofuels

1. The foreign exchange rate for converting world fuel prices in the base price formula is the end-of-day selling rate of Vietnam Joint Stock Commercial Bank for Foreign Trade, averaged over the number of days when fuel products were traded on the international market between two base price announcement periods.

2. The percentage volume ratio of unleaded gasoline and ethanol fuel ratio for calculating the base price of biofuels in this Circular is the highest blending ratio allowed by the competent authority for each type of biofuel; the actual blending ratio must be within the permitted limit set by the competent authority.

Article 9. Determining the Price of Fuel Ethanol for Calculating the Base Price of Biofuel Gasoline

1. The fuel ethanol for calculating the base price of biofuel gasoline as prescribed in this Circular includes unblended fuel ethanol and blended fuel ethanol (hereinafter referred to as ethanol). The ethanol price is only valid for calculating the base price and is determined according to the weighted average method based on the production volumes of domestic and imported ethanol prices.

a. The domestic ethanol price is the purchase price of ethanol at the factory according to the actual liters purchased by the main traders of petroleum products from domestic production sources for blending biofuel gasoline (excluding value-added tax); The domestic ethanol production volume is the corresponding actual liter volume reported at the ethanol price level.

The imported ethanol price is the Cost, Insurance, and Freight (CIF) price plus import duty (if applicable) calculated according to the actual liters. The imported ethanol production volume is the actual liter volume inspected at the unloading port vessel by the main traders of petroleum products during the reporting period.

b. The pricing cycle for ethanol is one month (within the period from the 21st day of the preceding month to the 20th day of the reporting month). The average ethanol price in the reporting month will be applied to the base price calculation period of the following month.

c. Based on the reports submitted by the main traders of petroleum products, the Ministry of Finance determines the fuel ethanol price and notifies the Ministry of Industry and Trade to apply it for calculating the base price of biofuel gasoline.

2. On the 21st day of each month, the main traders of petroleum products are responsible for submitting reports on the domestic ethanol price, imported ethanol price, and the production volumes of ethanol purchased from domestic production sources and imports to the Ministry of Finance (Price Management Department) and the Ministry of Industry and Trade (Domestic Market Department). In case the reporting date coincides with a public holiday, the submission of the report shall be postponed to the next working day.

Article 10. Determining the Percentage of Production Volume of Domestic and Imported Petroleum Products for Calculating the Base Price of Petroleum Products

1. The percentage of production volume of domestic and imported petroleum products for calculating the base price of petroleum products is determined as follows:

a) The production volume of domestic petroleum products is the sales volume of domestic oil refineries (excluding solvents and aviation fuels; excluding self-use and export volumes). The percentage of the production volume of domestic petroleum products equals the production volume of domestic petroleum products divided by the total production volume of imported and domestic petroleum products reported by the main producers of petroleum products during the reporting period.

b) The production volume of imported petroleum products is implemented as prescribed in point a, Clause 1, Article 3 of this Circular. The percentage of the production volume of imported petroleum products equals the production volume of imported petroleum products divided by the total production volume of imported and domestically produced petroleum products reported by the main producers of petroleum products during the reporting period.

c) Data collection is carried out quarterly (from the 21st day of the preceding month before the first month of the quarter to the 20th day of the last month of the quarter).

2. Quarterly, on the 21st day of the last month of the quarter, the main producers of petroleum products are responsible for compiling and reporting to the Ministry of Industry and Trade and the Ministry of Finance the detailed sales volume of petroleum products by type from the 21st day of the preceding month before the first month of the quarter to the 20th day of the last month of the quarter. The main producers of petroleum products bear legal responsibility for the accuracy of the reported data.

3. Based on the provided data on the import volume of petroleum products by the Ministry of Finance and the sales volume reports of domestic petroleum products by the main producers of petroleum products, the Ministry of Industry and Trade calculates and determines the percentage of the production volume of domestic and imported petroleum products for calculating the base price as stipulated in Article 1 of Decree No. 95/2021/NĐ-CP.

Article 11. Fixed profit margin for calculating the base price of petroleum products

The fixed profit margin stipulated in this Circular shall only be used to calculate the base price of petroleum products; the maximum fixed profit margin applied in the base price formula is 300 VND/liter, kg, which will be announced in writing by the Ministry of Finance to adjust accordingly with the actual management of petroleum products. The actual profit obtained from the business of petroleum products depends on the business results of petroleum product trading enterprises.

Article 12. Implementation organization and effectiveness

1. This Circular takes effect from January 2, 2022. From the date this Circular comes into force, the fixed petroleum product business costs, the fixed profit margin for calculating the base price of petroleum products continue to be implemented at the level already announced by the Ministry of Finance until a new announcement replaces it.

Repeal Article 4, Article 5, and Clause 2 of Article 15 of Joint Circular No. 39/2014/TTLT-BCT-BTC dated October 29, 2014, regarding the method of calculating the base price; the mechanism for forming, managing, using the Stabilization Fund and managing petroleum product prices according to Decree No. 83/2014/NĐ-CP dated September 3, 2014 of the Government on petroleum product business.

Repeal Clause 2 and Clause 3 of Article 1 of Joint Circular No. 90/2016/TTLT-BTC-BCT dated June 24, 2016 of the Ministry of Finance and the Ministry of Industry and Trade amending and supplementing some articles of Joint Circular No. 39/2014/TTLT-BCT-BTC dated October 29, 2014, regarding the method of calculating the base price; the mechanism for forming, managing, using the Stabilization Fund and managing petroleum product prices according to Decree No. 83/2014/NĐ-CP dated September 3, 2014 of the Government on petroleum product business and previous regulations contrary to this Circular.

Repeal Clause 1 of Article 1 of Circular No. 76/2020/TT-BTC dated August 14, 2020 amending and supplementing some articles of Joint Circular No. 39/2014/TTLT-BCT-BTC dated October 29, 2014 of the Ministry of Industry and Trade and the Ministry of Finance regarding the method of calculating the base price; the mechanism for forming, managing, using the Stabilization Fund and managing petroleum product prices according to Decree No. 83/2014/NĐ-CP dated September 3, 2014 of the Government on petroleum product business; Circular No. 38/2014/TT-BTC dated March 28, 2014 of the Ministry of Finance guiding some provisions of Decree No. 89/2013/NĐ-CP dated August 6, 2013 of the Government detailing the implementation of some provisions of the Price Law on valuation; Circular No. 138/2007/TT-BTC dated November 29, 2007 of the Ministry of Finance guiding the management, payment, settlement of investment compensation, support, and resettlement funds for the Son La Hydropower Project.

2. The Price Management Department (Ministry of Finance) shall be responsible for coordinating with relevant units to guide, organize the implementation, and inspect the implementation of this Circular in accordance with the regulations.

3. Petroleum product trading enterprises and petroleum product production trading enterprises shall be responsible for monitoring, grasping, and compiling actual data at their units, reporting to the Ministry of Finance (Price Management Department), the Ministry of Industry and Trade (Domestic Market Department) in accordance with the regulations of this Circular. Petroleum product trading enterprises shall bear full responsibility for the accuracy of the reported data sent to competent state agencies in accordance with the regulations.

Reporting shall be carried out through one of the following methods: Direct submission at the office of the receiving agency; Submission via postal service; Submission via fax or email (scanned copy) to the email address of the Ministry of Finance (Price Management Department) at [email protected] and the email address of the Ministry of Industry and Trade (Domestic Market Department) at [email protected].

During the implementation process, if there are difficulties or obstacles, they should be promptly reflected to the Ministry of Finance (Price Management Department) for study, amendment, and supplementation to ensure compliance./.