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Fuel distributors incur loss on commission cuts

By Thi Ha, Anh Minh   August 31, 2022 | 02:00 am PT
Fuel distributors incur loss on commission cuts
An employee pumps gasoline into a motorbike at a fuel station in Ho Chi Minh City in February 2022. Photo by VnExpress/Quynh Tran
Fuel retailers said they are suffering losses after their commissions were adjusted downward, and to nearly zero in some cases.

Citing data from fuel suppliers, the Thanh Nien newspaper has reported that the commission has been cut to VND0-500 per liter (0-2.1 U.S. cents), with distributors saying commissions of VND600-1,200 are needed just to break even.

The director of a distributor in Binh Duong said his firm is suffering losses of VND500-600 on every liter it sells. "The more fuel we buy, the bigger losses we make. We try to limit purchases but have to ensure enough supply for consumers."

Hocmon Trade JSC, operator of 31 gas stations in Ho Chi Minh City, said it was losing VND1,000 per liter.

Its CEO Le Van My said the company has lost nearly VND3.5 billion in the first half of this year due to commission cuts.

Bao, manager of a gas station in the southern Soc Trang Province said: "We suffer losses, but authorities do not let us stop selling. However, companies in other industries can stop operating to [prevent] losses."

Distributors are also facing supply shortages as importers and suppliers try to limit sales to minimize their losses on rising global prices and transport costs, while domestic prices have stayed the same after the most recent adjustment on Aug. 22.

An importer estimated that, as of Aug. 25, it was losing VND750-800 on a liter of gasoline, and VND2,000-2,600 on a liter of diesel.

Supply has fallen by around 20%, My said.

Currently a liter of gasoline in Vietnam costs VND23,720-24,660, a six-month low.

 
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