Joint Circular No. 90/2016/TTLT-BTC-BCT amending and supplementing certain provisions of Joint Circular No. 39/2014/TTLT-BCT-BTC dated October 29, 2014 on the method for calculating the base price; the mechanism for forming, managing, using the Price Stabilization Fund, and controlling gasoline prices as stipulated in Government Decree No. 83/2014/NĐ-CP dated September 3, 2014 on trading in gasoline.

 JOINT CIRCULAR

Amending and supplementing certain provisions of Circular Joint Circular No. 39/2014/TTLT-BCT-BTC dated October 29, 2014 on the method for calculating base price; mechanism for forming, managing, using the Price Stabilization Fund and managing gasoline prices in accordance with Government Decree No. 83/2014/NĐ-CP dated September 3, 2014 on trading in gasoline

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Pursuant to the Law on Commerce No. 36/2005/QH11 dated June 14, 2005;

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

Pursuant to the Accounting Law No. 03/2003/QH11 dated June 17, 2003;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 95/2012/NĐ-CP dated November 12, 2012, of the Government, detailing the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

- Sending via fax or email to the address [email protected] (scanned copy)."

Pursuant to Decree No. 149/2016/NĐ-CP dated November 11, 2016 of the Government amending and supplementing certain provisions of Decree No. 177/2013/NĐ-CP dated November 14, 2013 of the Government detailing and guiding the implementation of certain provisions of the Law on Prices;

Pursuant to Government Decree No. 08/2015/NĐ-CP dated January 21, 2015 detailing and providing implementation measures for the Law on Customs regarding customs procedures, inspection, supervision, and control;

Pursuant to Government Decree No. 12/2015/NĐ-CP dated February 12, 2015 guiding the implementation of Law No. 71/2014/QH13;

Pursuant to Decision No. 53/2012/QĐ-TTg dated November 22, 2012 of the Prime Minister on the issuance of the roadmap for applying the blending ratio of biofuels with traditional fuels;

Implementing Directive No. 23/CT-TTg dated August 31, 2015 of the Prime Minister on strengthening the use, blending, and distribution of ethanol gasoline in accordance with Decision No. 53/2012/QĐ-TTg dated November 22, 2012 of the Prime Minister on the roadmap for applying the blending ratio of biofuels with traditional fuels;

The Minister of Finance and the Minister of Industry and Trade issue this Circular Joint Circular amending and supplementing certain provisions of Circular Joint Circular No. 39/2014/TTLT-BCT-BTC dated October 29, 2014 on the method for calculating base price; mechanism for forming, managing, using the Price Stabilization Fund and managing gasoline prices in accordance with Government Decree No. 83/2014/NĐ-CP dated September 3, 2014 on trading in gasoline.

Article 1. Amending and supplementing certain provisions of Circular Joint Circular No. 39/2014/TTLT-BCT-BTC

1. AMENDING AND SUPPLEMENTING ARTICLE 3 AS FOLLOWS:

a) Amend and supplement Clause 1 as follows:

"1. Gasoline and related terms:

a) Gasoline as defined in this Circular includes various types of gasoline, diesel oil, fuel oil, various types of asphalt oil, biofuels, and other products used as engine fuel; excluding liquefied petroleum gas, aviation fuel, and compressed natural gas.

b) Biofuel as defined in this Circular refers to E5, E10 gasoline as stipulated in the National Technical Regulation on Gasoline, Diesel Fuel, and Biofuels (QCVN 1:2015/BKHCN) issued together with Circular No. 22/2015/TT-BKHCN of the Ministry of Science and Technology on November 11, 2015 and subsequent amendments and supplements (if any).

c) E5 gasoline is a mixture of unleaded gasoline and fuel ethanol, containing ethanol at a volume percentage of 4% to 5%, denoted as E5.

d) E10 gasoline is a mixture of unleaded gasoline and fuel ethanol, containing ethanol at a volume percentage of 9% to 10%, denoted as E10.

đ) Fuel ethanol includes modified fuel ethanol and unmodified fuel ethanol. Unmodified fuel ethanol (referred to as E100) is ethanol containing common impurities produced during the production process (including water). Modified fuel ethanol is unmodified fuel ethanol mixed with modifiers such as gasoline, naptha at a volume percentage of 1.96% to 5.0%."

b) Supplement Clause 6, Clause 7 as follows:

"6. Declaration of price for domestic refined gasoline and diesel products means that major traders and distributors of gasoline and diesel send written notifications of selling prices for these products to competent state authorities (Joint Ministries of Industry and Trade - Finance) when adjusting prices.

7. Registration of price for domestic refined gasoline and diesel products means that major traders and distributors of gasoline and diesel prepare, analyze the formation of prices, and submit price notification forms to competent state authorities (Joint Ministries of Industry and Trade - Finance) before adjusting prices for these products during the period when the government implements price stabilization measures as prescribed."

2. Amending and supplementing Clause 4 as follows:

a) Amend and supplement Clause 1 as follows:

"1. Base price for gasoline and diesel products (excluding E5, E10) includes the following factors and is calculated as follows: CIF price plus Import tax plus Special consumption tax multiplied by Foreign exchange rate plus Value-added tax plus Standard business costs plus Stabilization Fund contribution rate plus Standard profit margin plus Environmental protection tax plus Other taxes, fees, and contributions as prescribed by current laws. Among which:

- CIF price is calculated as the average world price (Platts Singapore price) plus costs to bring gasoline and diesel from abroad to Vietnam's ports. These factors are determined at actual temperatures. The world price is the average of the 15 days closest to the pricing date of the mandatory fuel reserve cycle as stipulated in Clause 1, Article 31 of Government Decree No. 83/2014/NĐ-CP.

Costs to bring gasoline and diesel from abroad to Vietnam's ports include: premium, insurance fee, transportation cost to Vietnam's ports, and reasonable and valid import-related expenses (if any); where the insurance fee and transportation cost to Vietnam's ports are based on the advanced level of major traders.

- The foreign exchange rate for calculating CIF price is the end-of-day selling rate of the Vietnam Bank for Foreign Trade, averaged over the 15 days closest to the pricing date of the mandatory fuel reserve cycle as stipulated in Clause 1, Article 31 of Government Decree No. 83/2014/NĐ-CP.

- The foreign exchange rate for calculating import tax and special consumption tax for base price calculation is as prescribed in Clause 3, Article 21 of Government Decree No. 08/2015/NĐ-CP dated January 21, 2015, Clause 6, Article 5 of Government Decree No. 12/2015/NĐ-CP dated February 12, 2015, and subsequent amendments and supplements (if any).

- Import tax, special consumption tax, value-added tax, environmental protection tax, and other taxes, fees, and contributions as prescribed by law."

b) Add Clause 2, Clause 3 as follows:

"2. The base price of E5 gasoline and E10 gasoline includes various factors and is determined by {the percentage volume of unleaded gasoline (%) multiplied by (x) (Cost, Insurance and Freight (CIF) price of unleaded gasoline plus (+) Import tax) multiplied by (x) foreign exchange rate plus (+) the percentage volume of fuel ethanol (%) multiplied by (x) fuel ethanol price} plus (+) Special Consumption Tax plus (+) Value Added Tax plus (+) Standard Operating Costs plus (+) Fund for Price Stabilization Reserve plus (+) Standard Profit plus (+) Environmental Protection Tax plus (+) Other taxes, fees, and other deductions as prescribed by current laws. Among which:

- The CIF price, foreign exchange rate, import tax, special consumption tax, value added tax, environmental protection tax; other taxes, fees, and other deductions shall be guided as provided in Clause 1.

- Unleaded gasoline applied to calculate the base price of E5 and E10 gasoline under this Circular is RON 92 gasoline.

- Fuel ethanol applied to calculate the base price of E5 and E10 gasoline under this Circular is non-denatured fuel ethanol (E100).

- The percentage volume of unleaded gasoline, the percentage volume of fuel ethanol applied to calculate the base price of E5 and E10 gasoline under this Circular is the highest blending ratio allowed according to the regulations of the competent authority suitable for each type of E5 and E10 gasoline; the actual blending ratio must fall within the permitted range of the competent authority.

- The price of non-denatured fuel ethanol (E100) applied to calculate the base price of E5 and E10 gasoline under this Circular is the selling price at actual temperature without value added tax, determined as the arithmetic average of E100 prices in Vietnam, CIF imported E100 price (if any) reported or declared by enterprises producing and importing E100 monthly in accordance with the law (if any) to the state management agency (Ministry of Finance (Price Management Department), Ministry of Industry and Trade (Domestic Market Department)).

The E100 price applied to calculate the base price of E5 and E10 gasoline will be reviewed on a monthly cycle. The arithmetic average E100 price of the current month will apply to the following month.

Enterprises producing and importing E100 have the responsibility to submit price reports and analysis of reasons for adjusting the E100 price along with relevant invoices and documents when there is a price adjustment, no later than the 25th of each month, and bear legal responsibility for the reported data; in case the 25th falls on a public holiday, the report will be submitted on the preceding working day.

In case of price declaration (if any), it shall be carried out in accordance with the provisions of the law on price declaration.

3. The Ministry of Finance shall take the lead in calculating the arithmetic average E100 price according to the principle stated in Clause 2 of this Article to apply in calculating the base price of E5 and E10 gasoline products."

c) Amend and supplement Clause 2 to become Clause 4 as follows:

"4. Primary traders have the responsibility to send to the Ministry of Finance (Price Management Department), Ministry of Industry and Trade (Domestic Market Department): reports on the results of reviewing fluctuations in costs to bring oil from abroad to Vietnamese ports, mixing costs for E5 and E10 gasoline (if applicable) no later than March 31 of the next fiscal year.

Based on the reports from primary traders and enterprises producing and trading E100, the Ministry of Finance (Price Management Department) shall take the lead and coordinate with the Ministry of Industry and Trade (Domestic Market Department) to aggregate, evaluate, inspect, and conduct field surveys (if necessary) to make appropriate adjustments."

3. Amend and supplement Clause 1 of Article 5 as follows:

a) Amend and supplement Point a, Point b as follows:

"a) The standard operating cost for petroleum products is the domestic circulation cost of petroleum products (wholesale cost, retail cost at actual temperature) of primary traders (including costs allocated to distributors, retailers, total agents, agents of petroleum products; including specific costs arising from E5 and E10 gasoline such as depreciation costs of the blending system, loss costs during the blending process, operation costs, certification inspection costs, financial costs, transportation costs due to changes in transportation routes, costs of converting stores to trade E5 and E10 gasoline...) to calculate the base price as follows:

- The average standard operating cost for unleaded gasoline types is: 1,050 VND/liter;

- The average standard operating cost for E5 and E10 gasoline types is: 1,250 VND/liter;

- The average standard operating cost for diesel and kerosene types is: 950 VND/liter;

- The average standard operating cost for bitumen types is: 600 VND/kg.

Among these, gasoline types and diesel and kerosene types include wholesale and retail costs; bitumen types only include wholesale costs.

For areas far from ports, main warehouses, and production facilities of petroleum products where reasonable and legitimate operating costs (verified by state audit or independent audit) are higher than the above regulations, primary traders shall balance, consider, decide, and bear full responsibility for their business results; meanwhile, they can set actual selling prices in those areas to compensate for reasonable and legitimate operating costs incurred, but the selling price shall not exceed 2% over the announced base price at the same time.

b) Each year, primary traders have the responsibility to conduct specialized audits on operating costs for petroleum products; costs to bring petroleum products from abroad to Vietnam, mixing costs for E5 and E10 gasoline, and review, aggregate, and report to the Ministry of Finance (Price Management Department), Ministry of Industry and Trade (Domestic Market Department) no later than March 31 of the next fiscal year. In case of necessity, the Ministry of Finance (Price Management Department), Ministry of Industry and Trade (Domestic Market Department) may require primary traders to submit ad hoc reports.

Based on the reports from primary traders, the Ministry of Finance (Price Management Department) shall take the lead and coordinate with the Ministry of Industry and Trade (Domestic Market Department) to aggregate, evaluate, inspect, and conduct field surveys (if necessary) to make appropriate adjustments."

b) Add Point d as follows:

"d) A fuel distributor shall be entitled to determine the retail price of petroleum products (except for bunker fuel, which is the wholesale price) actually sold in areas far from ports, main depots, and production facilities, but not exceeding 2% of the announced base price at the same time to cover reasonable and legitimate business costs incurred, verified by an independent audit when selling petroleum products in such remote areas."

4. Amend and supplement Clause 1 of Article 6 as follows:

"1. Primary traders have the right to independently implement international practices and legal regulations in petroleum trading, bearing full responsibility for their business outcomes; they must establish a Price Stabilization Fund and only use this fund for market stabilization and stabilizing petroleum prices in accordance with legal provisions."

The Price Stabilization Fund shall be recorded and monitored separately through a deposit account at a commercial bank in Vietnam. If a primary trader has a balance in the Price Stabilization Fund of 300 billion VND or more, the trader must also record and monitor the fund through an additional deposit account opened at another commercial bank. The banks chosen by the primary trader must be legally operating commercial banks in Vietnam with good operational quality and high creditworthiness, and the trader bears full legal responsibility for selecting banks to ensure the safety of the Price Stabilization Fund account.

The primary trader is the account holder, responsible for procedures related to opening the account, establishing the fund, and conducting deposit and withdrawal transactions from the Price Stabilization Fund account; concurrently, they must inform the Ministry of Finance (Price Management Department), the Ministry of Industry and Trade (Domestic Market Department) of the name, address, and contact information of the commercial bank where the Price Stabilization Fund account is held, in accordance with Clause 3, Article 39 of Decree No. 83/2014/NĐ-CP.

Article 2. Effective Date

This Circular takes effect from August 15, 2016./.