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Gasoline price management 'problematic', retailers claim

By Anh Minh, Thi Ha, Quynh Trang   October 8, 2022 | 12:41 am PT
Gasoline price management 'problematic', retailers claim
A gasoline seller wears a shirt that reads 'Out of gasoline' at a fuel station in Soc Trang Province. Photo by VnExpress/Nguyen Lam
Gasoline retailers are complaining that official intervention in fuel prices go against market principles and cause many stations to suffer loss or shut down.

For the second time in two months, 36 fuel retailers in Ho Chi Minh City on Friday submitted a letter of complaint to Prime Minister Pham Minh Chinh about the issues that have been plaguing their business in recent months due to the "problematic" management of the Ministry of Industry and Trade and Ministry of Finance.

They said that recently, gasoline suppliers have been charging retailers higher transportation costs in a separate bill so that the former can still sell fuel at the same government mandated price, which the two ministries have been decreasing.

Retailers, however, cannot raise prices higher than the mandated level, and therefore are losing money.

"If authorities continue to regulate the market against supply and demand principles, the market will become unstable," the letter said.

A retailer with eight stations in the southern province of Binh Duong said that each of his facilities is recording a loss of VND200-500 million ($8,373-20,934), while supply has fallen by 60-70% in recent months.

Nguyen Thi Bich Huong, a representative of the Vietnam Association of Small and Medium Enterprises, said that the two ministries have been lowering fuel prices just to get praised by the government without paying attention to real market developments.

Their decisions have "crushed" retailers, she added.

"Retailers are at the end of the supply chain, but we cannot determine our own commission and have to be dependent on the generosity of suppliers."

In response to the accusations, the two ministries said Friday they have agreed to acknowledge a higher transportation cost on fuel, which will be reflected on the fuel price adjustment on Oct. 11. This will help increase the commission for retailers.

The trade ministry claimed the finance ministry has been delayed in approving these changes despite its many requests, and this was the reason for the losses experience by retailers.

The finance ministry, however, said that one of the reasons for current issues is a decline in gasoline imports.

Gasoline imports in the third quarter fell by 40% from the second quarter, and diesel by 35%. Only 19 out of 33 suppliers imported gasoline.

The trade ministry needs to verify these suppliers’ claim that importing has been difficult due to recent fluctuations in global gasoline prices, and order them to ensure domestic supply in all circumstances, the finance ministry said.

 
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