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

[Tran Dinh Hoanh]

Dear brother Phong,

Oil will never be a "market economy."  At least not in our lifetime.  Oil is
a global monopoly.  Oil price is a monopoly price determined by OPEC.  So
the price of oil is not really ruled by supply and demand of a market
economy.

That is why in a year when the American citizens paid exhorbitant prices for
gasoline and gas price rose continuously (and still rising as of now), Exxon
had a 41-billion-USD profits in 2007, the largest profit in the US corporate
history.  Four largest oil companies had more than 100 billion USD of profit
in 2007.
http://www.usnews.com/articles/business/economy/2008/02/01/exxons-profits-measuring-a-record-windfall.html

And the US government is STILL subsididing US oil companies.

Vietnam oil is controlled by two monopoly arms in import and export.  And
the monopolies won't go away anytime soon because of the important role of
oil in the national security and economy and becasue the monopolistic nature
of the global oil industry.

So any talk about "market economy" and the law of supply and demand in oil
is unrealistic.   It is "supply and demand" in a distorted and monopolistic
environment.  What we need to do is to understand the monopolistic character
of oil industry to structure production, distribution and pricing in a way
that is fair and good for citizens and the national economy, and not to
allow absurd things happen like in the US--the government subsidizing oil
companies, and in a year when citizens pay rapid price increases, oil
companies post record windfall profits.

Have a great day!

Hoanh


On Fri, Mar 7, 2008 at 7:32 PM, <Hong-Phong_Pho at ita.doc.gov> wrote:

> [ Vietnam Business Forum ]
>
>
>
> Dear anh Hoanh:
> It's happen.  Vietnam exports cheap rice and imports more expensive,
> higher quality rice. Supply and demand.
> I think  you meant to say why should Vietnamese citizens pay more for gas
> than Lao citizens.  I don't think they do, unless the Lao are subsidizing
> even more.  Vietnamese importers are paying world market price or higher
> because they are not able to buy in high volume for lack of storage
> capacity.
> Vietnamese consumers are paying world market price minus any subsidies
> because although Vietnam produces crude oil, it imports refined products,
> and because the crude oil that is exported and the refined products that is
> imported are both commodities.
> California produces oil.  Californians pay more than most for gasoline.
> Japan supplies the world with cars, yet cars are very expensive in Japan.
> There are many other ways to deal with inflation that's better than
> subsidizing gasoline with oil revenue.  Lowering import tariffs and other
> taxes on gasoline, for example.  A stronger VND should get the consumer you
> more gasoline per dong.
> But the important point here is that we shouldn't encourage Vietnam to
> slide back into command economy mode after all the progress toward a market
> economy.  Even if PetroVietnam and Petechim, etc. are still SOE's, they
> should be able to make their business decision free of undue government
> interference.
> Cheers,  HPP
>
>
>
>   *"Tran Dinh Hoanh" <tdhoanh at gmail.com>*
> Sent by: vnbiz-bounces at mail.saigon.com
>
> 03/06/2008 09:05 PM   Please respond to
> vnbiz at vietlinks.net
>
>    To
> vnbiz at vietlinks.net  cc
>   Subject
> Re: [Vnbiz] Not on Vietnam but may shed light on the inflation
>  debate....a readers rsponse from
>
>
> --
> Tran Dinh Hoanh, Esq., LLB, JD
> Washington DC
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