Gasoline retailers call on PM help as business yield little profit

By Thi Ha   October 29, 2023 | 09:00 pm PT
Gasoline retailers call on PM help as business yield little profit
An employee pumps gasoline into a motorbike in Ho Chi Minh City. Photo by VnExpress/Thanh Tung
Hundreds of gasoline retailers have called on Prime Minister Pham Minh Chinh for help as they have not received any profit in recent times.

In a letter submitted to the PM on Friday, the retailers, represented by Giang Chan Tay, CEO of fuel retailer Boi Ngoc in the southern province of Tra Linh, said that they have been selling at a loss and receive zero commission from distributors.

This is because the Ministry of Finance has not clearly stated how much profit will be divided between the distributors and the retailers when each liter of gasoline is sold, he explained.

"Who is receiving all the profits if we are receiving none?" Tay asked in the letter.

In Vietnam, retailers source their fuel from the distributors and sell it at the price the government sets. Prices are often adjusted every 10-11 days.

This means when the expenses of selling fuel, such as paying staff and utility and maintenance bills, exceed the retail price, retailers will suffer losses.

They, however, cannot shut down their business to stop the cash bleed as any operation halt must be approved by the government.

This is why in the last 12 months many retailers have been spending their own money to cover rising expenses, and have now posted severe losses, Tay said.

He added that regulations need to be changed so that the share of profit between distributors and retailers are clearly identified so retailers can continue their business.

The Government Office had earlier this month tasked Deputy Prime Minister Le Minh Khai to review the fuel retail price.

It also ordered the Ministry of Industry and Trade to complete its proposed amendments to fuel regulations.

The ministry has earlier suggested that the timeframe to review the cost of distributing fuel be shortened from six months to three months to keep prices more updated with global trends.

Last year many retailers also called on the PM and other government bodies to help as they had to bear big losses as retail prices were set lower than expenses.

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