Businesses must be free to buy and sell.
The Ministry of Industry and Trade is seeking comments on the Decree on Petroleum Business - Draft 04. This Decree will replace Decree 83 of 2014, Decree 95 of 2021 and Decree 80 of 2023.
Giving comments to complete the draft, Mr. Hoang Trung Dung - Director of APP Additives and Petroleum Products Development Joint Stock Company said that the current petroleum business is applying the vertical management model. That is, goods from the source are sold to distributors, distributors are distributed to agents and agents sell to stores for retail stores to the people.
"In this distribution chain, there is often suspicion about commissions between low distribution levels. The State has set a ceiling price for gasoline, so business activities cannot "jump" over the regulated price.
If the price drops, the primary importer will lose money first, so they will be forced to tighten the discount to reduce their losses. The following distribution levels will do the same and retailers and distribution stores will have nothing left. That is the bottleneck," Mr. Dung emphasized.
In order for the petroleum distribution system to meet the criteria of ensuring energy security and serving people's lives, according to Mr. Dung, the most basic thing is to cover the operating costs of the system. From there, the supply chain is maintained and operates at a minimum level of break-even. There must be some savings for investors, shareholders and those who contribute capital to businesses in the petroleum business chain.
The most inappropriate thing in the current discount mechanism is that if the draft Decree on petroleum trading does not allow traders to distribute and trade freely with each other and only buy from the main distributors, it will be very difficult for small retailers. Because if all the main distributors are at a loss, who will the distribution enterprises buy from when the discounts of the main distributors are equal?
If the discount is not enough to cover transportation costs, private businesses, gas station owners or distribution companies will all suffer losses, leading to a shortage of goods.
Besides, after the price adjustment date, when the price of gasoline was raised by the inter-ministerial committee, goods were naturally available. This clearly shows that the main suppliers were holding back the goods and they also tightened the discount to prevent losses for themselves.
"We believe that distributors and businesses should have the right to buy and sell gasoline directly. Legally, we need to be treated equally in business," Mr. Dung said.
National Assembly Delegate Hoang Van Cuong - Member of the National Assembly's Finance and Budget Committee, said that we are now at a stage where we have all the conditions to integrate into the market. Therefore, businesses must be free to buy and sell and must be free to compete.
The state should not set a maximum price.
Regarding price regulations, Mr. Nguyen Tien Thoa - former Director of the Price Management Department (Ministry of Finance) cited that Resolution 55 of 2020 clearly stated two price issues. That is, applying market prices to all types of energy and removing all barriers to ensure transparent energy prices determined by the market.
The Law on Prices also stipulates that gasoline is not on the list of products whose prices are set by the State. And the rule is that if businesses are allowed to set prices, the State will respect their right to self-determine prices and compete on prices.
According to him, the State should create principles and regulations to guide businesses in calculating, not set costs that businesses must follow. The State should not regulate maximum prices in any form.
Ms. Nguyen Thuy Hien - Deputy Director of the Domestic Market Department, Ministry of Industry and Trade said that petroleum management is multi-purpose, so it is also difficult for us in the process of building and operating petroleum business.
Regarding discounts, Ms. Hien said that the cost to make up the price of gasoline is currently operating at the maximum price and businesses are allowed to sell below this price, not exceeding this price.
"We must calculate all costs correctly and fully when constructing. The price formula has been clearly stipulated by the inter-ministerial committee in Circulars 103, 104 and Decree 80 of 2023," said Ms. Hien.
