[Vnbiz] Not on Vietnam but may shed light on the inflation debate....a readers rsponse from

[Tran Dinh Hoanh]

Dear brother Phong,

Foreign investors can have their share.  I am saying that Viet Petro should
have its some of its share transferred to offset the import cost.  This is
nothing mysterious about it.  All private companies have to do the same
thing (to "pass-on the saving" to the customers if they want to stay in
business for a long time.

Vietnam produces rice, shouldn't Vietnamese customers pay for a much lower
rice price than Iranian customers?  Wouldn't be absurd if Vietnamese
customers have to pay the same price for rice as Iranians pay?

Why should Vietnamese customers, citizens of an oil export country, pay less
for gasoline than citizens of a non-oil country like Lao?  Wouldn't that be
absurd if citizens of an oil-export country have to pay the same price for
oil as citizens of a non-oil country?
I can't tell how much of the export profit can be used to offset import
price, but that is another issue.  Let's start planning the transfer first,
then we will know how much can be done.  Any bit to help reduce inflation is
good.  Oil price affects food price.

And I am not talking about using rice money to offset oil price.  We don't
want to use one market to distort another market if we don't have to.  I am
just talking about ONE market--oil.  But if we have to do that to reduce
spiral inflation, anything that may solve the problem is not out of the
question.

Have a great day!

Hoanh
On Thu, Mar 6, 2008 at 7:27 PM, <Hong-Phong_Pho at ita.doc.gov> wrote:

> [ Vietnam Business Forum ]
>
>
>
> Dear anh Hoanh:
> What's absurb here is that if your recommendation is actually taken,
> Vietnam would step backward from becoming a market economy!
> Your "analysis" assumes an all powerful pre-doi moi command economy
> government that runs an economy by edict.
> Fortunately, two decades of market reforms have made that nearly
> impossible, even in the monopoly sector of oil and gas.
> Just a few practical aspects:
> -  Crude oil is produced and exported under production sharing contracts
> with foreign investors who sanks in billions of dollars into the venture.
>  They do this for profit.  Who can tell them to give up their "windfall"
> profit.
> -  Oil is a global commodity, as is gasoline; distorting their prices have
> unintended economic consequences that can't be managed.
> -  Vietnam's total oil production/export at 320 mln bbl/day is not that
> much higher than its consumption/import at 270 mln bbl/day.  Is there really
> much to "transfer"?
> -  Gasoline price lowered by such a subsidy will benefit a Honda driver
> and the real estate zillionaire in her Phantom all the same, as well as
> Vietnamese products exported all over the world.  Why should Vietnam
> (indirectly) sell it's crude oil for cheap to the World?  Where is the
> fairness in that?
> -  Suppose Vietnam has no crude oil, but it would still have to import
> refined products, and it has a big year exporting rice or coffee, would you
> advocate taking windfall profit from rice or coffee producers and exporters
> to offset high gas prices?
> The command economic model does not work!
> Cheers,  HPP
>
>
>
> --
> Tran Dinh Hoanh, Esq., LLB, JD
> Washington DC
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