Over 250 petitions submitted to authorities on fragility of petroleum regulations

Photo: VNA

On March 14, over 250 urgent petitions regarding market volatility were lodged by fuel and oil dealers with Prime Minister Pham Minh Chinh. These retailers own almost 9,000 outlets throughout the nation.

According to the petitions, the Regulations on Petroleum Business in Decrees No.83/2014/ND-CP issued in March 2014, and No. 95/2021/NQ-CP issued in November 2021, are the primary cause of the depletion of fuel station owners.

To minimise local shortages, gasoline merchants suggest procuring commodities from three distinct sources, including distribution traders.

"Only importing items from one focal point would eliminate the rivalry of enterprises," Le Van Bau, director of Le Hong Thu Co., Ltd., argued in the appeal.

These retailers also advocated amending the rules on the methodology for determining the base price and discount rates to guarantee justice and put a stop to the scenario of opening and selling at a loss, shutting down, and being sanctioned by the authorities that has persisted for over a year.

According to merchants, the basic pricing formula has a standard cost of doing business per litre of petrol (4.3-5.3 US cents per litre, depending on the kind), but at varying times, major firms have retained the whole amount above with no discounts.

The state management of petroleum is delegated to the Ministry of Finance (MoF) and the Ministry of Industry and Trade (MoIT) by the Vietnamese government. Ho Duc Phoc, Minister of Finance, said at a session on February 28 where the Central Committee's Economic Commission explained the state of the petroleum market and the results of tasks and remedies in the administration of petroleum that there are some limits on how the state can handle petroleum.

According to Minister Phoc, one of the present difficulties is that there are too many wholesalers and distributors. According to him, Vietnam has 34 significant retailers, while Japan has five and China has only four.

In the minister's opinion, too many middlemen would increase expenses and cause fuel prices to rise. He advocated reducing wholesaler regulations from 34 to 10 units. Likewise, the existing number of roughly 332 distribution merchants is excessive and must be decreased.

According to several enterprises, Vietnam's petroleum market lacks a focal point for administration to direct, control, and clarify duties. The government makes the final decisions.

Minister Phoc suggested in a meeting of the National Assembly in October last year to shift the supervision of petroleum, from price regulation, cost standards, and business, to the MoIT so that the supply can be proactive. However, the MoIT proposed that the administration of petroleum be delegated to the MoF.

Amendments to Law on Petroleum can go some way to help attract funds Vietnam wants to introduce mechanisms and policies to attract more investment in oil exploration and production activities on the back of the amended Law on Petroleum, with experts, businesses, and legislators pointing out several core issues.

MoIT and MoF discuss seven petroleum market issues The Ministry of Industry and Trade (MoIT) has suggested seven provisions to secure the petroleum supply, including an increase in the national petroleum reserve from nine to fifteen days of net imports.