Decree No. 85/2022/NĐ-CP on the financial mechanism for Vietnam Oil and Gas Corporation (PVN) when settling the price subsidy for products under the Nghi Son Integrated Refining and Petrochemical Project

DECREE
On the financial mechanism for Vietnam Oil and Gas Group when settling the price adjustment amount in the product take-or-pay scheme of the Nghi Son integrated petrochemical project

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the State Budget Law dated June 25, 2015;

Pursuant to Resolution No. 42/2021/QH15 dated November 13, 2021 of the National Assembly at the second session of the 15th National Assembly;

At the proposal of the Minister of Finance;

The Government issues this Decree on the financial treatment for Vietnam Oil and Gas Group when settling the price adjustment amount in the product take-or-pay scheme of the Nghi Son integrated petrochemical project according to the product take-or-pay contract signed between Vietnam Oil and Gas Group and Nghi Son Petrochemical Joint Stock Company Limited, implementing Point 4 of Resolution No. 42/2021/QH15 of the National Assembly, including: determining the need and principles for State financial treatment; preparing the budget estimate, auditing, finalizing the state budget and handling the difference between revenue and input costs of the product take-or-pay activity of the project when determining the annual business results of the Parent Company - Vietnam Oil and Gas Group.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. The Parent Company - Vietnam Oil and Gas Group (hereinafter referred to as PVN).

Article 2. Applicability

2. Nghi Son Product Marketing Branch.

3. State Audit Office.

4. State Capital Investment Committee.

5. Ministry of Finance.

6. Ministry of Industry and Trade.

7. Individuals and organizations related.

1. Nghi Son Product Marketing Branch (hereinafter referred to as PVNDB) is a dependent accounting unit of the Parent Company - PVN established to implement the product take-or-pay and distribution of fuel products of the Nghi Son integrated petrochemical project.

Article 3. Explanation of Terms

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

2. The Nghi Son integrated petrochemical project (hereinafter referred to as the Nghi Son Petrochemical Project) is a project granted the first investment certificate number 262022000036 on April 14, 2008 by the Management Board of Nghi Son Economic Zone and subsequent adjustments in accordance with the law.

3. Nghi Son Petrochemical Joint Stock Company Limited (hereinafter referred to as Nghi Son Petrochemical Company) is a company established based on the joint venture establishment contract between PVN and partners with Idemitsu Kosan Co., Ltd; Mitsui Chemicals, INC. and Kuwait Petroleum Europe B.V. on April 7, 2008.

4. The product take-or-pay contract of the Nghi Son Petrochemical Project (hereinafter referred to as the Take-or-Pay Contract) is the contract signed between PVN and Nghi Son Petrochemical Company on January 15, 2013 and any supplementary agreements or amendments (if any).

5. The service contract is the contract signed between PVNDB (authorized by PVN) and Nghi Son Petrochemical Company on November 13, 2017 for PVNDB to provide support services for Nghi Son Petrochemical Company and any supplementary agreements or amendments (if any).

6. Free Trade Agreements include multilateral or bilateral agreements that Vietnam has participated in signing or joining and are currently in effect for Vietnam (hereinafter referred to as FTA).

7. LPG is liquefied petroleum gas as defined in the Government's Decree on trading gas.

8. The Guarantee and Government Commitment Agreement is the agreement signed between the Government of the Socialist Republic of Vietnam and Idemitsu Kosan Co., Ltd; Mitsui Chemicals, INC.; Kuwait Petroleum Europe B.V. and Nghi Son Petrochemical Company on January 15, 2013 for the Nghi Son Petrochemical Project (hereinafter referred to as GGU).

9. Implementing the take-or-pay chain is the act of PVNDB taking over the products of the Nghi Son Petrochemical Project according to the provisions of the Take-or-Pay Contract (including aviation turbine fuel JET-A1) and selling them to oil and gas wholesalers or other buyers in accordance with the law on oil and gas trading and providing services to Nghi Son Petrochemical Company according to the service contract.

9. Implementing the off-take chain involves PVDNB purchasing products from the Nghi Son Refinery Project in accordance with the Off-take Contract (including jet fuel JET-A1) and reselling them to authorized fuel traders or other buyers as stipulated by laws on fuel trade, and providing services to the Nghi Son Refinery Company as specified in the Service Contract.

Chapter II

SPECIFIC PROVISIONS

Section 1. DETERMINATION OF THE AMOUNT OF FUNDS REQUESTED FROM THE STATE FOR FINANCIAL SETTLEMENT AND PRINCIPLES OF STATE FINANCIAL SETTLEMENT TO SERVE THE PREPARATION OF THE STATE BUDGET ESTIMATE AND FINAL ACCOUNTING

Article 4. Determination of the amount of funds requested from the State for financial settlement

1. The amount of funds requested from the State for financial settlement for PVN corresponding to the negative variance arising in the year (selling price lower than the guaranteed purchase price, PVN must pay the price difference in the guaranteed purchase contract for gasoline, diesel, LPG products of the Nghi Son Refinery Project according to the provisions of the Guaranteed Purchase Contract).

2. The negative variance under Clause 1 of this Article shall be determined as follows:

3. The basis for determining the revenue from implementing the guaranteed purchase chain as stipulated in Clause 2 of this Article is the total revenue generated in the year, calculated from January 1st to December 31st each year, including revenue from selling gasoline, diesel, LPG products to major oil traders or other buyers and revenue from PVNDB providing services to the Nghi Son Refinery Company.

a) Revenue from selling gasoline, diesel, LPG products is determined as follows:

Where:

- The market adjustment fee/price adjustment included in the selling price according to the business practice of gasoline, diesel or LPG (for gasoline, diesel/LPG products) is based on the selling price formula stipulated in the economic contract signed between PVNDB and major oil traders or other buyers. The position of the market adjustment fee/price adjustment in the revenue calculation formula for each sale of gasoline, diesel, LPG products mentioned above will be adjusted and updated based on the negotiation results in the economic contract signed between PVNDB and major oil traders or other buyers (if applicable).

b) Revenue from PVNDB providing services to the Nghi Son Refinery Company is based on the total revenue generated in the year (excluding VAT), calculated from January 1st to December 31st each year, for providing services to the Nghi Son Refinery Company as stipulated in the service contract.

4. The basis for determining the costs for implementing the guaranteed purchase chain corresponding to the volume of PVNDB sales in the year as stipulated in Clause 2 of this Article is the total costs incurred in the year (excluding VAT), calculated from January 1st to December 31st each year, including:

a) Cost of goods sold (including the value of goods PVNDB is obligated to pay to the Nghi Son Refinery Company);

b) Sales expenses;

c) Administrative expenses;

d) Direct financial expenses related to implementing the guaranteed purchase chain (excluding interest expense of the parent company - PVN borrowing funds to temporarily advance capital to PVNDB);

đ) Other related expenses (including petroleum trading expenses as prescribed by laws on petroleum trading, provisions for bad debts, expenses for fulfilling contractual indemnity obligations in implementing the guaranteed purchase chain) are determined separately or structured within the cost categories specified in Points a, b, c, and d of this Clause (if applicable), in accordance with current state regulations.

5. The determination of sales expenses, storage expenses, and other related expenses as stipulated in Points b, c, d, and đ of Clause 4 of this Article (if applicable) for inventory at the end of PVN's obligation to pay the price difference in the guaranteed purchase, is based on the allocation of costs according to the ratio of revenue from sales corresponding to the inventory volume compared to the total revenue from implementing the guaranteed purchase chain sold in the same year (calculated from the time PVN ends its obligation to pay the price difference in the guaranteed purchase).

6. The basis for determining the value of goods PVNDB (including the price difference in the guaranteed purchase) is obligated to pay to the Nghi Son Refinery Company is the total value of goods generated in the year (excluding VAT) corresponding to the volume of guaranteed purchase sales in the year, calculated from January 1st to December 31st each year. Among which:

a) The value of goods PVNDB is obligated to pay to the Nghi Son Refinery Company (including the price difference in the guaranteed purchase) for each guaranteed purchase period, is determined as follows:

Guaranteed purchase price (excluding all types of taxes)

a) The value of goods that PVDNB is obligated to pay to the Nghi Son Refinery Company for each off-take batch, including price adjustment amounts, shall be determined as follows:

(the price adjustment amount equivalent to the import tariff rate of 7% for gasoline and diesel products and 5% for LPG products according to the commitment at the GGU)

d) The price to determine the value of goods for inventory volume is determined based on the first-in-first-out (FIFO) method.

đ) For the difference in production volume actually received by PVNDB from Nghi Son LHD Company exceeding the sales volume in the year will be carried over to the following year as the basis for determining the amount of money proposed for State handling.

7. The Market Premium/Price Adjustment included in the average weighted guaranteed sales price must not exceed the Market Premium/Price Adjustment included in the average weighted selling price.

8. The delivery point to determine the time when PVNDB's obligations commence shall be based on the provisions of the Guaranteed Sales Contract (after the guaranteed product has passed through the flange at the connection gate between the Nghi Son LHD Plant and the ship, truck, or pipeline of the buyer).

9. For LPG products, there must be a confirmation from PVN that PVN has incurred guaranteed sales obligations for these products of the Nghi Son LHD Project to be sold in the domestic market.

10. During the period of fulfilling the obligation to pay the price adjustment amount within the guaranteed sales period to Nghi Son LHD Company, if PVNDB exceeds the guaranteed sales volume as stipulated in the initial Guaranteed Sales Contract (dated January 15, 2013), with the value of goods paid by PVNDB to Nghi Son LHD Company without the price adjustment amount within the guaranteed sales period and generates interest, or PVNDB imports replacement volumes due to temporary shutdowns at the Nghi Son LHD Plant and generates interest, then the revenue and expenses (excluding the price adjustment amount within the guaranteed sales period) for the excess volume or imported volume will be included in the revenue and expense structure of the guaranteed sales chain, as defined in Clause 2 of this Article.

Article 5. Principles for State Financial Handling

1. The State will handle financial matters for PVN when paying the price adjustment amount for actual received products of the Nghi Son LHD Project but not exceeding 10 years from the date PVN officially guarantees the sale of the project's products on the principle that:

a) In cases where the results of implementing the guaranteed sales chain in a year (determined according to the formula prescribed in Clause 2 of Article 4 and based on the provisions from Clause 3 to Clause 10 of Article 4 of this Decree) generate profit, the State will not handle the price adjustment amount within the guaranteed sales period that PVNDB is obligated to pay to Nghi Son LHD Company corresponding to the guaranteed sales volume sold in the year.

b) In cases where the results of implementing the guaranteed sales chain in a year (determined according to the formula prescribed in Clause 2 of Article 4 and based on the provisions from Clause 3 to Clause 10 of Article 4 of this Decree) generate loss, the amount of financial handling by the State for PVN shall be determined according to the provisions of Clause 2 of Article 4 of this Decree but not exceeding the difference between the total price adjustment amount generated in the year (including Market Premium/Price Adjustment, Special Consumption Tax - if included in the guaranteed sales price) that PVNDB is obligated to pay to Nghi Son LHD Company compared to the amount that major oil traders or other buyers are obligated to pay to PVNDB corresponding to the import tariff, Special Consumption Tax - if applicable, and Market Premium/Price Adjustment from selling gasoline, diesel, and LPG products. Among which:

- The corresponding difference for each sales period is determined as follows:

- Determining the maximum amount of financial handling by the State for PVN according to the difference between the total price adjustment amount generated in the year compared to the total amount that major oil traders or other buyers are obligated to pay to PVNDB according to the formula prescribed in this clause shall be applied in cases where the lowest preferential import tariff rate committed by Vietnam in FTAs for gasoline, diesel, and LPG products according to the pricing structure in the selling price is greater than 0%. If the amount determined according to this point and the above formula is greater than the price adjustment amount within the guaranteed sales period prescribed in point b of Clause 6 of Article 4 of this Decree, then the amount of financial handling by the State for PVN shall be equal to the price adjustment amount within the guaranteed sales period prescribed in point b of Clause 6 of Article 4 of this Decree.

- In cases where the lowest preferential import tariff rate committed by Vietnam in FTAs for gasoline, diesel, and LPG products according to the pricing structure in the selling price is equal to 0%, the maximum amount of financial handling by the State for PVN shall be determined according to the provisions of Clause 2 of Article 4 of this Decree but not exceeding the price adjustment amount within the guaranteed sales period prescribed in point b of Clause 6 of Article 4 of this Decree.

c) The amount of financial handling by the State for PVN as prescribed in point b of this clause shall be determined after excluding the guaranteed sales volume exceeding the guaranteed sales volume stipulated in the initial Guaranteed Sales Contract (dated January 15, 2013); the volume not meeting quality standards stipulated in the Guaranteed Sales Contract and national technical regulations (QCVN) of Vietnam as prescribed by law.

c) The financial treatment amount provided by the State to PVD pursuant to point b of this clause shall be determined after excluding the excess off-take volume beyond the initial off-take volume specified in the first signed Off-take Contract (dated January 15, 2013), non-compliant quality volumes as stipulated in the Off-take Contract and national technical regulations (QCVN) of Vietnam as prescribed by law.

2. After the National Assembly approves the annual central state budget expenditure plan (NSTW) for the financial treatment requested by the State for PVN, during the fiscal year, quarterly, PVN may temporarily use post-tax profits to pay the price subsidy amount within the approved budget for this purpose but shall not exceed the approved budget for this item.

Section 2. IMPLEMENTATION OF THE STATE BUDGET ESTIMATE, AUDIT AND SETTLEMENT OF THE FINANCIAL TREATMENT FUNDS PROVIDED BY THE STATE

Article 6. Budget Expenditure Estimate and State Budget Accounting

1. PVN is a first-level budget entity that implements the estimate of the financial treatment funds requested from the State annually (including the needs for the volume of guaranteed purchase carried over from the previous year), which is determined according to the provisions of Article 4, Article 12 and other relevant provisions of this Decree, but shall not exceed the annual central state budget revenue estimate from post-tax profits after setting aside funds for the Parent Company - PVN.

2. The Board of Directors of PVN issues a resolution to approve the budget estimate of the financial treatment funds requested from the State according to the provisions of Clause 1 of this Article from post-tax profits after setting aside funds for the Parent Company - PVN, and reports to the Ministry of Finance before July 20 each year to be included in the annual state budget expenditure plan as prescribed; at the same time, it reports to the State Audit Agency, the State Capital Management Committee at Enterprises, and the Ministry of Industry and Trade for monitoring and supervision.

3. After receiving the report of the PVN Board of Directors as stipulated in Clause 2 of this Article, the Ministry of Finance incorporates the estimated financial treatment funds for PVN into the annual central state budget expenditure plan for reporting to the Government to submit to the National Assembly for decision when considering and approving the state budget; in the implementation process, record the central state budget revenue - record the central state budget expenditure (other areas of central state budget expenditure) corresponding to the financial treatment funds provided by the State for PVN, PVN does not actually remit to the state budget the post-tax profits after setting aside funds corresponding to the financial treatment funds provided by the State for PVN.

4. During the period awaiting the National Assembly's approval of the annual central state budget expenditure plan for the financial treatment funds requested from the State for PVN, PVN may temporarily use production and business capital to pay the price subsidy for the Nghi Son Heat Supply Company according to the actual received volume from the Nghi Son Heat Supply Company.

Article 7. Handling the Difference Between Budget Estimate and Actual Expenditure

1. In case there is a shortfall difference between the central state budget expenditure plan stipulated in Article 6 of this Decree approved by the National Assembly and the actual expenditure needs arising in the year, PVN may temporarily allocate from the production and business capital of the Parent Company - PVN, then arrange the next year's budget to repay the shortfall.

2. In case there is an excess difference between the central state budget expenditure plan approved by the National Assembly and the actual expenditure arising in the year, cancel the budget for the excess difference, PVN returns the central state budget according to regulations.

Article 8. State Audit and Settlement of the State Budget

1. After implementing the determination of the financial treatment funds requested from the State according to the provisions of Article 4, Article 5, Article 12 and other relevant provisions of this Decree, PVNDB prepares a report on the business results (profit/loss) of the Branch for the year for the purpose of determining the financial treatment funds requested from the State for PVN. At the same time, PVNDB transfers all revenues and expenses incurred from the guaranteed purchase chain and related activities to the Parent Company - PVN.

2. Before June 30 each year, PVN submits a written report to the State Audit Agency regarding the financial treatment funds requested from the State for PVN arising in the immediately preceding year to serve the audit work as prescribed in Clause 3 of this Article; at the same time, it sends these reports to the Ministry of Finance for monitoring. The documents attached with the PVN report as prescribed in this clause include:

a) The resolution of the PVN Board of Directors approving the financial treatment funds requested from the State for PVN.

b) The PVNDB business result report for the purpose of determining the financial treatment funds requested from the State for PVN as prescribed in Clause 1 of this Article (which has been independently audited).

3. Based on the PVN report as prescribed in Clause 2 of this Article, the State Audit Agency conducts an audit of the financial treatment funds requested from the State, prior to submitting the audit report on the settlement of the annual state budget to the National Assembly according to the Law on State Audit, state budget laws, and the provisions of Article 4, Article 5, Article 12 and other provisions of this Decree.

4. Based on the audit results of the State Audit Agency as prescribed in Clause 3 of this Article, PVN prepares the settlement of expenditures from the state budget corresponding to the financial treatment funds, the PVN Board of Directors is responsible for approving the settlement report, and submits it to the Ministry of Finance before October 1 of the following year for the Ministry of Finance to incorporate it into the annual state budget settlement report, report to the Government, and submit to the National Assembly according to state budget laws.

Section 3. TREATMENT OF DIFFERENCES BETWEEN REVENUE AND COSTS FOR IMPLEMENTING THE PACKAGE GUARANTEE CHAIN AND DETERMINATION OF THE BUSINESS RESULTS OF PVN TO SERVE ASSESSMENT AND RANKING OF PVN

Article 9. Treatment of differences between revenue and costs for implementing the package guarantee chain for the Parent Company - PVN

Based on the revenue, other income, costs, and business results reported by PVNDB to the Parent Company - PVN:

1. In cases where the revenue from implementing the package guarantee chain (including other revenues and other income) as stipulated in Clause 2, Article 4 of this Decree is greater than or equal to (≥) the costs for implementing the package guarantee chain as stipulated in Clause 2, Article 4 of this Decree, all revenues and costs of PVNDB will be consolidated into the production and business revenues and costs of the Parent Company - PVN.

2. In cases where a negative difference arises due to the revenue from implementing the package guarantee chain (including other revenues and other income) as stipulated in Clause 2, Article 4 of this Decree being less than (<) the costs for implementing the package guarantee chain as stipulated in Clause 2, Article 4 of this Decree, the Parent Company - PVN shall record a reduction in the cost of goods sold of the Parent Company - PVN corresponding to the volume of gasoline, oil, and LPG guaranteed by the Nghi Son Project, while recording an increase in the amount receivable from the state budget equivalent to the negative difference determined according to Clause 2, Article 4 of this Decree but not exceeding the maximum amount that the State finances for PVN as stipulated in Point b, Clause 1, Article 5 of this Decree.

Article 10. Determination of the business results of the Parent Company - PVN after treating differences between revenue and costs for implementing the package guarantee chain

1. In cases where the revenue from implementing the package guarantee chain (including other revenues and other income) is greater than or equal to (≥) the costs for implementing the package guarantee chain, the business results of the Parent Company - PVN will be determined according to the current regulations.

2. In cases where the revenue from implementing the package guarantee chain (including other revenues and other income) is less than (<) the costs for implementing the package guarantee chain, PVN will consolidate the revenue (including other revenues and other income) and the remaining costs (after recording the reduction in cost of goods sold as stipulated in Clause 2, Article 9 of this Decree) of PVNDB into the revenues and costs of the Parent Company - PVN to determine the business results of the Parent Company - PVN.

Chapter III

IMPLEMENTATION

Article 11. Responsibilities of Ministries, Agencies, and the Vietnam Oil and Gas Group

1. The Vietnam Oil and Gas Group:

a) Ensuring payment of the price adjustment amount to the Nghi Son Petrochemical Company not exceeding the quantity under the Package Guarantee Contract (based on the guaranteed quantity specified at the time of signing the first Package Guarantee Contract on January 15, 2013) and not guaranteeing the quantity that does not meet quality standards as stipulated in the Package Guarantee Contract and does not meet the Vietnamese Quality Standards as required by law.

b) Being responsible for the negotiation and signing of the Package Guarantee Contracts and product sales contracts after the Package Guarantee period (including terms regarding the pricing formula for the Package Guarantee and selling prices), and the effectiveness of the implementation of the Package Guarantee Chain, ensuring the completion of the financial mechanism as stipulated in this Decree, PVNDB does not incur cumulative losses. The determination of annual profits/losses of PVNDB for evaluation by PVN as stipulated herein follows the principle of excluding losses corresponding to the maximum amount that the State must finance for PVN as stipulated in Point b, Clause 1, Article 5 of this Decree but recognizing positive differences obtained from the difference between Market Premium/Price Adjustment (including special consumption tax if applicable) that traders or other buyers are obligated to pay to PVNDB at the selling stage compared to the price adjustment amount in the Package Guarantee equivalent to the Market Premium/Price Adjustment (including special consumption tax) that PVNDB is obligated to pay to the Nghi Son Petrochemical Company at the Package Guarantee stage corresponding to the guaranteed quantity sold. In cases where the amount of State financing for PVN determined according to Point b, Clause 1, Article 5 of this Decree equals (=) the price adjustment amount in the Package Guarantee as stipulated in Point b, Clause 6, Article 4 of this Decree, the determination of annual profits/losses of PVNDB for evaluation by PVN as stipulated herein follows the principle of excluding the loss corresponding to the price adjustment amount in the Package Guarantee as stipulated in Point b, Clause 6, Article 4 of this Decree and the special consumption tax (if applicable) arising from this price adjustment amount.

c) Determining the amount proposed to the State for financial treatment when paying the price adjustment amount in the Package Guarantee for gasoline, oil, and LPG of the Nghi Son Petrochemical Project as stipulated in Articles 4, 5, 12, Clause 1, and Clause 2, Article 6 of this Decree and implementing the settlement of expenses from the state budget corresponding to the amount of State financial treatment as stipulated in Clause 4, Article 8 of this Decree.

d) Determining the revenue, costs, and actual results of implementing the Package Guarantee Chain as stipulated in Article 4 of this Decree and the losses from implementing the Package Guarantee Chain that are not covered by post-tax profits, after setting aside funds of the Parent Company - PVN (if any) as stipulated in Point b, Clause 1, Article 5 of this Decree for declaration, payment of taxes, and accounting records according to tax laws, accounting laws, and the financial regulations of the Parent Company - PVN.

đ) Inspecting and supervising the selling price and management of costs for implementing the Package Guarantee Chain and market premiums as stipulated in Article 4 of this Decree according to internal governance regulations of the Group and the provisions of law.

e) Reporting to the Ministry of Finance and the State Audit Agency on the amount of State financial treatment for PVN as stipulated in Article 8 of this Decree.

g) Reporting to the State Capital Investment Committee to monitor the temporary use of the Parent Company - PVN's production and business capital to pay the price adjustment amount as stipulated in Clause 4, Article 6 of this Decree.

h) Reporting to the State Capital Investment Committee and the Ministry of Industry and Trade the resolution of the Board of Directors of the Group approving the budget for the amount proposed to the State for financial treatment as stipulated in Clause 2, Article 6 of this Decree to serve monitoring, approval of production and business plans, and construction of annual product supply plans.

i) Advance payments and timely full payment to PVNDB for capital sources serving the implementation of the guaranteed purchase chain and price compensation payments in cases where the provisions set forth in point a of this clause are met, handle annual issues arising according to the provisions of the Guaranteed Purchase Contract and other related contracts.

2. The State Capital Management Committee:

Supervise and inspect PVN and PVNDB's organization of the guaranteed purchase chain implementation, price compensation payments, and temporary use of production and business capital to make price compensation payments as stipulated in Clause 4, Article 6 and Clause 1, Article 7 of this Decree.

3. Ministry of Finance:

a) Aggregate into the state budget estimate and perform the procedures to report to the competent authority as provided for in Clause 3, Article 6 of this Decree for approval of the annual state budget estimate for the financial treatment amount proposed by PVN as determined under Article 4 of this Decree.

b) Aggregate into the annual final settlement report of the state budget, report to the Government, submit to the National Assembly according to the laws on the state budget the financial treatment amount provided by the state for PVN as stipulated in Clause 4, Article 8 of this Decree based on the audit results of the State Audit Agency and approve the final settlement report of the PVN Board of Directors.

4. Ministry of Industry and Trade:

a) Monitor the production plan of the Nghi Son Refining and Petrochemical Company and PVN and PVNDB's organization of the implementation of the guaranteed purchase chain for gasoline, diesel, and LPG products of the Nghi Son Refining and Petrochemical Company in accordance with the commitments made in the Guaranteed Purchase Guarantee Undertaking.

b) Announce the time when PVN officially takes over the guaranteed purchase of products from the Nghi Son Refining and Petrochemical Project based on PVN's report, send to the agencies and units specified in Clause 1, Clause 3, Clause 4, and Clause 5, Article 2 of this Decree to organize implementation and monitor and oversee according to the provisions of this Decree.

5. State Audit Agency:

a) Audit the financial treatment amount proposed by PVN before submitting to the National Assembly the annual final settlement report of the state budget as stipulated in Clause 2 and Clause 3, Article 8 of this Decree.

b) Provide comments on the budget estimate of the financial treatment amount proposed by PVN when implementing Clause 5, Article 10 of the Law on State Audit based on PVN's report as stipulated in Clause 2, Article 6 of this Decree.

Article 12. Transitional Provisions

Financial treatment for the period from the date PVN officially takes over the guaranteed purchase of products from the Nghi Son Refining and Petrochemical Project as announced by the Ministry of Industry and Trade as stipulated in point b, Clause 4, Article 11 of this Decree until the end of 2022 (after the National Assembly approves the supplementary state budget estimate for 2022) shall be implemented as follows:

1. Undistributed profits from the results of the guaranteed purchase chain implementation from 2018 to the end of 2021 (excluding the amount that the state must financially treat for PVN as stipulated in point b, Clause 1, Article 5 of this Decree) shall be used to offset the amount that the state must financially treat for PVN during the period from the date PVN officially takes over the guaranteed purchase of products from the Nghi Son Refining and Petrochemical Project to the end of 2022.

2. Supplement the state budget expenditure estimate for 2022 with the amount proposed by the state for financial treatment for PVN (including the actual amount generated from the date PVN officially takes over the guaranteed purchase of products from the project to the end of 2021 and according to the planned implementation in 2022) from the post-tax profit after setting aside reserves of the Parent Company - PVN in 2022 as follows:

a) The supplementary state budget expenditure estimate for 2022 shall be determined according to the provisions of Article 4 of this Decree and after offsetting undistributed profits as stipulated in Clause 1 of this Article but not exceeding the state budget revenue estimate from post-tax profit after setting aside reserves of the Parent Company - PVN in 2022.

b) In case there is insufficient source to cover the amount generated up to the end of 2022, allocate the state budget estimate for 2023 to continue the financial treatment as stipulated in Clause 1, Article 7 of this Decree.

c) The consolidation, final settlement of the state budget, and auditing by the State Audit Agency of the amount proposed by the state for financial treatment generated during the period from the date PVN officially takes over the guaranteed purchase of products from the project to the end of 2022 shall be carried out according to the provisions of Article 8 of this Decree.

d) Final settlement of the state budget for 2022 for the amount treated financially by the state for PVN according to the supplementary state budget expenditure estimate for 2022.

3. Regarding the determination of inventory value

a) PVN and PVNDB are not required to retrospectively apply the provisions on determining the value of inventory as stipulated in point d, Clause 6, Article 4 of this Decree on accounting books and financial statements during the period from the date PVN officially takes over the guaranteed purchase of products from the project to the end of 2021.

b) All impacts on cost of goods sold during the period from the date PVN officially takes over the guaranteed purchase of products from the project to the end of 2021 due to changes in the method of determining the value of inventory as stipulated in point d, Clause 6, Article 4 of this Decree shall be reflected in the operating results of PVN and PVNDB in 2022 as the basis for preparing the budget estimate and final settlement of the state budget for 2022, corresponding to the amount proposed by the state for financial treatment for PVN.

Article 13. Implementation Provisions

1. Effective date:

a) This Decree takes effect from the date of issuance.

b) This Decree ceases to be effective from the date the final settlement of the state budget for the amount proposed by the state for financial treatment for PVN according to the laws on the state budget and relevant laws (including the handling of inventory volume at the end of the price compensation obligation for the Nghi Son Refining and Petrochemical Company) is completed.

2. Ministers, Heads of ministerial-level agencies, Heads of government agencies; State Audit Agency; Chairman of the Board of Directors, General Director of the Vietnam Oil and Gas Group are responsible for implementing this Decree.