The petroleum trading floor will operate as a commercial market

How does the petroleum exchange work?

Talking about the idea of ​​establishing a petroleum exchange , talking to Lao Dong, Mr. Nguyen Xuan Thang - Director of Hai Au Phat Petroleum Company Limited - said that the petroleum exchange operates in the form of a commercial market. petroleum trade. In particular, the seller will register and submit full information about the goods, including quantity, quality, certificate of origin, storage, and transaction price to the trading floor.

The buyer will base on price and product type to choose the quantity and type of product he wants to buy. The state will manage the operations of the exchange, protect transactions on the floor and collect taxes or fees corresponding to the amount of goods traded.

According to Mr. Thang, the main supply of the petroleum exchange is part or all of the imports from key traders; part or all of the petroleum produced by the refinery; amount of regulated gasoline and oil circulating on the market; Petroleum sources from national reserves; source of petroleum converted from the Petroleum Price Stabilization Fund.

Key traders have the right to choose part of the supply for the traditional petroleum business system like the existing petroleum business model; Part of it is for sale on the trading floor to sell to qualified parties to buy this amount of gasoline.

Distributors have the right to sell the amount of gasoline they own on the exchange to sell to parties qualified to buy this amount of gasoline. Retail traders have the right to sell the amount of gasoline they own on the exchange, to sell to parties qualified to buy this amount of gasoline.

"Forms of petroleum traders are equal in participating in buying and selling on the exchange; enterprises are responsible for paying taxes and fees to the State for the amount of goods traded. The State organizes and manages manage and collect taxes and fees in accordance with the volume of transactions on the floor. The gasoline price stabilization fund (with the amount of gasoline purchased with money set aside for the fund) is priced and offered for sale by the State management agency to stabilize the price. determine the source of petroleum, avoid increases, reduce shock and the risk of disruption of the petroleum supply system. National petroleum reserves are priced and offered for sale on the floor from liquidation, transfer, and sale of old products - Buy new to ensure gasoline quality," Mr. Thang suggested.

There are still many concerns

Some experts and businesses believe that establishing a petroleum trading floor is currently difficult to do, because it must meet all necessary and sufficient conditions according to the market mechanism.

Mr. Nguyen Xuan Hung - Deputy General Director of Vietnam Petroleum Group - said that not only Vietnam but in the world, many countries also have ambitions to open petroleum trading floors. However, success seems to be limited to only two exchanges, including the US floor trading WTI oil and the London floor trading Brent oil when they have a large enough playing field and strong enough economic sanctions.

The remaining exchanges, such as those in the Middle East, or areas with large trading volumes like Singapore, are only considered secondary exchanges, because of factors such as not having enough volume of participants, or not being able to absorb them. A large number of customers are trading centers...

Therefore, with a large dependence on world petroleum prices when world prices account for 64-72% of Vietnam's price structure, Mr. Hung raised the question, will we escape when we have a petroleum trading floor? from the influence of world exchanges?

Talking to Lao Dong, Mr. Nguyen Ngoc Quynh - Deputy General Director of Vietnam Commodity Exchange (MXV) - said that in Vietnam, trading of products such as crude oil and natural gas is regulated by the Ministry of Industry and Trade. Allows pilot transactions at the Vietnam Commodity Exchange from May 2020 to May 2024.

However, the current reality is that the transaction has not attracted many businesses to participate because the policy is not stable. Accordingly, the decision to allow pilot transactions for each year must be renewed. The pilot will stop from May 27, 2024 for unclear reasons.

Decree 83 on petroleum trading previously allowed businesses to transact via MXV, but the revised decrees removed this regulation. The Ministry of Finance also does not have a policy on accounting regimes for businesses participating in transactions at MXV in general and petroleum businesses in particular.

"From those difficulties, we believe that establishing a finished petroleum trading floor needs to be considered carefully and comprehensively, and should not be rushed," Mr. Quynh affirmed.