Gas traders claim compensation

October 19, 2016 | 16:35
Some 800 small and medium sized gas trading companies have submitted a proposal to the Prime Minister Nguyễn Xuân Phúc and Minister of Industry and Trade Trần Tuấn Anh on gas trading requirements.
A gas shop in HCM City’s District 3. -- VNA/VNS Photo Thanh Vũ

They have asked to maintain the current regulations on requirements for gas trading under Decree No. 19/2016/NĐ-CP.

The businesses proposed that if the government reduces the requirements, they would claim compensation for the several billions of đồng they had invested in gas infrastructure.

Recently, several gas traders complained about shortcomings in the decree, leading to difficulties. They said the decree’s regulations stipulating that gas companies have storage tanks and total LPG bottle capacities of at least 2.62 million litres were hard to fulfill, especially for those in remote and mountainous areas with low population density. Therefore, they asked for a review and amendment of the rules to facilitate trading as each gas company would have to invest VNĐ25-30 billion (US$1.1-1.3 million) in the gas tank system when applying for a business licence.

Lê Xuấn Tuyến, director of Việt Xô Gas Joint Stock Company in northern Thái Bình Province, said the company had to borrow a huge loan from banks to invest in the infrastructure to meet the requirement.

The decree was promulgated on March 22, 2016, replacing Decree No 107/2009/NĐ-CP on November 26, 2009, on gas trading to facilitate gas companies.

Tuyến said the lower storage tanks and total LPG bottle capacities were one-third of what was stated in the previous decree. It meant that the decree allowed gas traders with low capacities to participate in the market, affecting other gas companies.

Sharing his ideas, Nguyễn Minh Châu, director of Thanh Hóa Petroleum Company, said smuggled gas trading is popular in the market. In case of a fire or explosion, it was hard to hold traders responsible for the violations.

‘If the government continues to lower the business regulations, the ministry should consider compensating us for our loans from the bank for investment into gas infrastructure,” Châu added.

Lê Khắc Lãm, director of Hoàng Lãm Transport and Trading Company, said the decree clearly stipulates the business models of gas importers, exporters, producers and processors, as well as distributors, agents and gas shops. It meant that companies could choose a business model suitable with their capacity.

Lãm said some agents could take advantage of the reviewed rules (if approved) to become distributors despite the lack of storage tanks and total LPG bottle capacities.

“It will be good if there are more number of traders participating in the market. However, those who do not meet requirements of infrastructure could cause unhealthy competition and be unsafe for customers,” he added.

He proposed that the government and the ministry maintain the conditions.

In a conference held in Hà Nội last month, deputy minister Trần Quốc Khánh affirmed that the ministry has asked relevant departments to collect gas firms’ ideas to submit to the government for review with an aim to provide the most favourable business environment to the firms.


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