What is the formula for calculating discount prices for petroleum businesses?
For over a year now, Mr. Nguyen Van Hung (73 years old, Hao Nam Street, Dong Da district, Hanoi) has had to go to Lang Ha gas station to fill up his tank, because the gas station on Hao Nam Street near his house has been closed and surrounded by corrugated iron.
"This gas station closed after 8 years of business, causing us a lot of inconvenience. Every time we need to fill up with gas, we have to go very far, all the way to Lang Ha gas station, 4km from our house," said Mr. Hung.
This is just one of many businesses that have had to leave the petroleum market. One of the difficulties of petroleum businesses is that the discount rate is very low, only a few hundred dong, even losing money if deducting costs such as premises, labor, transportation, etc.
Talking to Lao Dong Newspaper, Mr. Nguyen Xuan Thang - Director of Hai Au Phat Petroleum Company Limited had to exclaim "never before has the petroleum business been as difficult as it is now". He said that when world oil prices increase, the discount is pressured by key enterprises and reduced sharply. But when world prices stagnate or decrease, the discount increases.
"Currently, there is no formula or standard to calculate discounts for gasoline retail businesses, which is not suitable for the gasoline market," Mr. Thang commented.
That is the reason why Mr. Thang believes that gasoline discounts have been unstable since Decree 83 of 2014 on gasoline trading until now. The lack of standards, discount sharing ratio, costs, and profits is unfair to distribution and retail businesses.
The leader of a petroleum business in Hanoi told Lao Dong that the increase in world oil prices has caused import costs for key businesses to increase and thus the discounts for distribution and retail businesses to decrease.
Currently, world oil prices are "plummeting", so the discount for gasoline retailers is maintained at a fairly high level, ranging from VND1,600 - VND1,800/liter. However, in the previous days, when world oil prices were high, key businesses "squeezed" the discount of retail businesses.
At one point, the discount for retail businesses was 400-500 VND per liter of gasoline; oil was 350-450 VND per liter. At this rate, after deducting transportation, labor, and loss costs, retailers said they were incurring losses on each liter of gasoline and oil sold.
Regarding the solution, Mr. Nguyen Xuan Thang said that retail and distribution enterprises of petroleum need to get goods from many parties to ensure price competition. At the same time, there must be a ratio of dividing business costs and standard profits for enterprises.
Worry about many petroleum businesses leaving the market
In fact, business difficulties, prolonged losses and tightening of operations by management agencies have caused a series of petroleum distribution businesses to voluntarily return their licenses.
According to Lao Dong's investigation, in the first 7 months of 2024, more than 20 petroleum distributors requested to return their business condition certificates. Currently, there are about 290 petroleum distributors on the market.
Some petroleum businesses believe that the number of distribution businesses leaving the market will increase if the revised Decree on Petroleum Business is about to be issued in the direction that petroleum distributors are only allowed to buy goods from key enterprises and are not allowed to buy and sell with each other.
A petroleum business in the South told Lao Dong that distributors are businesses with the right to compete freely. If they are not allowed to cross-buy from each other, market competitiveness will not be guaranteed.
"During periods of erratic prices, thanks to cross-selling, distributors can share with each other about quantity and selling price. Restricting this right may not stabilize the market," said the business leader.
In case the draft Decree on petroleum business does not allow traders to distribute and trade with each other, Mr. Nguyen Tien Thoa - former Director of the Price Management Department (Ministry of Finance) said that it is necessary to specify more conditions in the decree.
In which, it stipulates a mechanism for close linkage, connection, and mutual control in the "vertical" petroleum supply system from the main trader to the distributor onwards through contracts and commitments.
At the same time, there is a registered supply system with higher responsibility in ensuring sources, sharing business costs, and reasonable discounts to ensure the harmony of interests between about 300 distributors and 32 main traders.
