Circular No. 234/2009/TT-BTC guiding the mechanism for the formation, management, and use of the Fuel Price Stabilization Fund according to the provisions of Government Decree No. 84/2009/NĐ-CP dated October 15, 2009 on fuel trading.

CIRCULAR

Guidelines for the mechanism of formation, management, and use of the Fuel Price Stabilization Fund in accordance with

the provisions of Government Decree No. 84/2009/NĐ-CP dated October 15, 2009 on petroleum business

______________________________________

Pursuant to the Accounting Law No. 03/2003/QH11 dated June 17, 2003 of the National Assembly of the Socialist Republic of Vietnam;

Pursuant to the Price Ordinance No. 40/2002/PL-UBTVQH10 dated 26/04/2002 of the Standing Committee of the National Assembly;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Government Decree No. 170/2003/NĐ-CP dated December 25, 2003 detailing the implementation of certain provisions of the Price Ordinance; and Government Decree No. 75/2008/NĐ-CP dated June 9, 2008 amending and supplementing certain provisions of Government Decree No. 170/2003/NĐ-CP;

Pursuant to Government Decree No. 129/2004/NĐ-CP dated May 31, 2004 detailing and guiding the implementation of certain provisions of the Accounting Law in business activities;

Pursuant to Government Decree No. 84/2009/NĐ-CP dated October 15, 2009 on petroleum business (hereinafter referred to as Decree No. 84/2009/NĐ-CP);

After receiving the opinion of the Ministry of Industry and Trade in Circular No. 11339/BCT-TTTN dated November 10, 2009 regarding the Circular guiding the implementation of Decree No. 84/2009/NĐ-CP;

The Ministry of Finance hereby guides the mechanism of formation, management, and use of the Fuel Price Stabilization Fund in accordance with the provisions of Decree No. 84/2009/NĐ-CP as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the mechanism of formation, management, and use of the Fuel Price Stabilization Fund (hereinafter referred to as the Fuel Stabilization Fund).

Article 2. Applicability

This Circular applies to principal traders engaged in petroleum business in accordance with the Trade Law; Decree No. 84/2009/NĐ-CP and related legal documents.

This Circular does not apply to: traders permitted to import, produce, and blend specialized fuels for their own specific needs without selling them to the market as prescribed by law; traders permitted to import petroleum products into the country under the Investment Law for display at trade fairs or exhibitions, or as non-reimbursable and reimbursable aid; traders producing petroleum products who sell petroleum products to importers.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. Petroleum products as defined in this Circular include: gasoline, diesel oil, fuel oil, and kerosene.

2. World petroleum prices are the prices of finished petroleum products traded on international markets as published by Platt's Singapore.

3. Base price is the price used to form the retail price of petroleum products, including various factors and calculated as follows: {Cost, Insurance, and Freight (CIF) plus Import Tax plus Special Consumption Tax} multiplied by the foreign exchange rate plus Standard Operating Costs plus Stabilization Fund plus Pre-tax Profit Margin plus Value Added Tax plus Fuel Excise Duty plus Other Taxes, Fees, and Deductions as stipulated by current laws. The base price is calculated based on the average number of days of inventory turnover as specified in Article 22 of Decree No. 84/2009/NĐ-CP.

4. Cost, Insurance, and Freight (CIF) is the world petroleum price plus Insurance Fee plus Transportation Costs to Vietnamese ports.

5. The foreign exchange rate for calculating the base price is the average selling rate between US dollars (USD) and Vietnamese dong (VND) that commercial banks sell to principal traders, corresponding to the number of days of inventory turnover as specified in Article 22 of Decree No. 84/2009/NĐ-CP.

6. Standard Operating Costs are the domestic circulation costs (wholesale and retail costs) of principal traders (including costs allocated to General Agents and Agents) for calculating the base price at the maximum level, wherein:

- The average retail cost across regions nationwide for gasoline and diesel oil is a maximum of 600 VND/liter;

- The average wholesale cost across regions nationwide for fuel oil is a maximum of 400 VND/kg.

These maximum standard operating costs will be announced by the Ministry of Finance for adjustment in line with the actual business operations of principal traders during each period.

7. Pre-tax Profit Margin is the maximum profit from domestic petroleum business of principal traders for calculating the base price at 300 VND/liter, kg, and will be announced by the Ministry of Finance for adjustment in line with the actual business operations of principal traders during each period.

Actual profits depend on the business results of the traders.

Chapter II

SPECIFIC PROVISIONS

Article 4. Mechanism for Establishing the Fuel Price Stabilization Fund

1. Primary traders have the right to proactively implement business methods for fuel that comply with international practices and legal regulations, bear responsibility for the effectiveness of production and business operations; establish the Price Stabilization Fund and only use the Price Stabilization Fund for price stabilization purposes as prescribed by the competent authority.

2. The Price Stabilization Fund is established by a specific, fixed amount within the base price according to Clause 9, Article 3, Chapter I of Decree No. 84/2009/NĐ-CP, which is 300 VND/liter (kg) of actual fuel consumption and is determined as a cost item in the structure of the primary trader's base price. In cases of necessity, the Ministry of Finance will adjust the level of establishment and timing of the Price Stabilization Fund to be consistent with market fluctuations and notify primary traders to implement accordingly.

3. Based on the directives of the Joint Leadership of the Ministry of Finance and the Ministry of Industry and Trade, the Inter-Ministerial Monitoring Team (Finance - Industry and Trade) on fuel prices announces the time to stop establishing, and restore the level of establishing the Price Stabilization Fund for primary traders to implement in the following cases:

a) Prescribing a lower level of establishing the Price Stabilization Fund than stipulated in Clause 2 of this Article or temporarily stopping the establishment of the Fund when factors causing fluctuations result in the base price increasing by more than twelve percent (12%) compared to the current selling price; or increases in fuel prices have adverse effects on economic development, social progress, and people's livelihoods;

b) When factors causing fluctuations result in the base price decreasing compared to the level before stopping the establishment or decreasing from the level prescribed in point a above, the Inter-Ministerial Monitoring Team on fuel prices announces the time to restore the level of establishing the Price Stabilization Fund as prescribed in Clause 2 of this Article.

4. The total amount established for the Price Stabilization Fund is determined by multiplying the level prescribed in Clauses 2 and 3 of Article 4 of this Circular by the actual volume of fuel consumed in the domestic market during the period of establishing the Price Stabilization Fund.

Article 5. Mechanism for Using the Price Stabilization Fund

Primary traders may use the Price Stabilization Fund to stabilize fuel prices in the following cases:

1. In cases where factors causing fluctuations result in the base price increasing by more than seven percent (7%) but not exceeding twelve percent (12%) compared to the current retail price, primary traders have the right to adjust the selling price increase up to seven percent (7%) plus sixty percent (60%) of the price difference calculated from the ratio of the base price increase exceeding seven percent (7%) to the actual increase ratio within the range of increase exceeding seven percent (7%) to twelve percent (12%); the remaining forty percent (40%) is offset from the Price Stabilization Fund.

2. Using the Price Stabilization Fund to implement the provisions of Clause 1 of this Article in accordance with the minimum time interval between two (02) price adjustments.

3. In cases where factors causing fluctuations result in the base price increasing by more than twelve percent (12%) compared to the current selling price, primary traders have the right to adjust the selling price as prescribed in Clause 1 of this Article. The remaining price difference is decided by the Ministry of Finance in coordination with the Ministry of Industry and Trade to announce measures to stabilize prices through tax policy management, the establishment and use of the Price Stabilization Fund, and other administrative economic measures as prescribed by current laws.

4. In cases where increases in fuel prices have adverse effects on economic development, social progress, and people's livelihoods, the Ministry of Finance coordinates with the Ministry of Industry and Trade to decide and announce measures to stabilize prices through tax policy management, the establishment and use of the Price Stabilization Fund, and other administrative economic measures as prescribed by current laws.

Article 6. Accounting and Settlement of the Price Stabilization Fund

1. Principal traders shall be responsible for fully and accurately accounting for the amount set aside for the Price Stabilization Fund in the cost of goods sold.

2. The Price Stabilization Fund shall be used in accordance with the provisions of Article 5 of this Circular. When using the gasoline price stabilization fund, principal traders shall account for a reduction in the cost of goods sold.

3. At the end of the fiscal year, if there is a surplus in the Price Stabilization Fund, principal traders are permitted to carry it over to the next year.

4. On the 30th day of the first month of each quarter, principal traders must submit reports to the Ministry of Finance and the Ministry of Industry and Trade on the situation regarding the establishment, use, and balance of the Price Stabilization Fund for the previous quarter. In special cases, principal traders must submit reports upon request from the Ministry of Finance.

Article 7. Accounting Methods and Financial Statement Presentation for the Price Stabilization Fund

1. Supplement Account 357 - Gasoline Price Stabilization Fund

1.1 - Content of Account: Account 357 is used to reflect the current status, increases, and decreases in the gasoline and diesel fuel price stabilization fund of principal traders. The accounting for this account is carried out according to certain principles as stipulated in Article 6 of this Circular.

1.2 - Structure and Content Reflected in Account 357 - Gasoline Price Stabilization Fund:

Debit Side: Decrease in the gasoline price stabilization fund due to its use in accordance with current state regulations.

Credit Side: Increase in the gasoline price stabilization fund due to its establishment in accordance with current state regulations.

Credit Balance: The amount of the gasoline price stabilization fund remaining at the time of reporting.

2. Accounting Method for Establishing and Using the Gasoline Price Stabilization Fund:

2.1 - When establishing the gasoline price stabilization fund in accordance with current laws, the accounting entry is as follows:

Debit Account 632 - Cost of Goods Sold

Credit Account 357 - Gasoline Price Stabilization Fund

2.2 - When using the gasoline price stabilization fund for price stabilization purposes in accordance with current laws, the accounting entry is as follows:

Debit Account 357 - Gasoline Price Stabilization Fund

Credit Account 632 - Cost of Goods Sold

3. Financial Statement Presentation:

Supplement Item "Gasoline Price Stabilization Fund" - Code 340 on the Balance Sheet. This item reflects the gasoline price stabilization fund at the time of reporting. The data entered into this item is the credit balance of Account 357 "Gasoline Price Stabilization Fund" in the accounting ledger.

Chapter III

IMPLEMENTATION

Article 8. Responsibilities of Relevant Authorities

1. The Department of Corporate Finance shall take the lead in coordinating with the Price Management Department (Ministry of Finance) to supervise the collection, expenditure, and balance of the price stabilization fund of principal traders.

2. Based on directives from the Joint Leadership (Finance - Industry and Trade), the Price Management Department (Ministry of Finance) shall be responsible for notifying the timing of setting aside, stopping the setting aside, and the level of setting aside the price stabilization fund as prescribed in Clause 2 and Clause 3, Article 4 of this Circular so that principal traders can implement them.

3. In case the Inter-Ministerial Supervisory Team on Gasoline Prices discovers that principal traders adjust gasoline prices in an unreasonable manner as stipulated in Clause 9, Article 3, Chapter I, and Article 27, Chapter III of Decree No. 84/2009/NĐ-CP and the guidelines in this Circular, the Inter-Ministerial Supervisory Team shall issue a notification to suspend the sale price of the trader and require the trader to sell at a reasonable price in accordance with the above regulations.

4. The Financial Inspectorate (Ministry of Finance) shall be responsible for recovering and imposing administrative penalties in the field of pricing and statistical accounting in accordance with current regulations in the following cases:

a) Recovering into the State budget the price difference arising between the unreasonable price set by principal traders and the reasonable price as guided in Clause 3 of this Article for the actual volume of gasoline consumed during the entire period of violation.

b) Imposing administrative penalties in the field of pricing and requiring compliance with regulations when principal traders fail to comply with:

- The time interval between two price adjustments as stipulated in Article 27, Chapter III of Decree No. 84/2009/NĐ-CP;

- Not adhering to the level of setting aside, the time to stop setting aside, or the time to resume the level of setting aside the price stabilization fund.

- Not using the price stabilization fund in accordance with the regulations of the competent authority.

c) Not complying with the guidance on accounting methods for establishing and using the price stabilization fund and financial statement presentation as stipulated in Articles 6 and 7, Chapter II of this Circular.

5. Principal traders shall be responsible for implementing the task of stabilizing gasoline prices, while also carrying out the establishment, use, accounting, and guidance on accounting methods for establishing and using the price stabilization fund and financial statement presentation of the price stabilization fund in accordance with this Circular.

Article 9. Effective Date

1. This Circular takes effect from December 15, 2009, the date on which Decree No. 84/2009/NĐ-CP comes into force, replacing Circular No. 56/2009/TT-BTC dated March 23, 2009, issued by the Ministry of Finance on guiding the mechanism for forming, using, and settling the gasoline price stabilization fund, and Circular No. 159/2009/TT-BTC dated August 6, 2009, issued by the Ministry of Finance on amending and supplementing Circular No. 56/2009/TT-BTC dated March 23, 2009, on guiding the mechanism for forming, using, and settling the price stabilization fund.

2. The Director of the Price Management Department, the Director of the Department of Corporate Finance, the Head of the Accounting System and Audit Department, the Chief Inspector of the Ministry of Finance, principal traders, and heads of related units shall be responsible for implementing this Circular.

During implementation, if there are difficulties or obstacles, units are advised to promptly report to the Ministry of Finance for research and appropriate amendments and supplements./.