There is an additional option for petroleum distribution businesses to buy and sell from each other.
Ms. Nguyen Thuy Hien - Deputy Director of the Ministry of Industry and Trade said that the draft Decree on petroleum business to be submitted to the Government soon, the Drafting Committee will receive opinions from professional agencies, experts and business representatives. For controversial opinions, the Drafting Committee will present many options for consideration.
"In the upcoming draft, we will present an additional plan to allow gasoline distributors to buy and sell from each other, as suggested by experts, scientists, and professional agencies, so that the Government can consider and decide on a plan that is suitable for practice, ensuring objectivity and science," said Ms. Hien.
In the submission on the draft Decree on petroleum business under construction, the Ministry of Industry and Trade presented the Government with two options as follows:
Option 1: The draft decree stipulates that petroleum distributors are not allowed to buy and sell petroleum with each other, but are only allowed to buy and sell petroleum with key petroleum traders.
Option 2: The draft decree continues to stipulate that petroleum distributors have the right to buy and sell petroleum with each other as it does now.
With option 1, the Ministry of Industry and Trade believes that there are advantages in implementing according to the conclusions of inspection, examination and investigation agencies, reducing the intermediary level in the distribution stage. Cutting out the roundabout purchase and sale of gasoline through gasoline distributors, creating "fake" data on the amount of gasoline consumed in the market.
Thereby helping key petroleum traders accurately calculate the amount of petroleum consumed domestically to purchase from domestic and foreign manufacturers to serve domestic consumption.
However, the disadvantage of this plan, according to the drafting committee, "may have the element of limiting competition in the market, causing reactions from gasoline distributors who claim they are being discriminated against."
With option 2, the Ministry of Industry and Trade said it has advantages that are consistent with the recommendations of petroleum distributors. It creates conditions for diversifying the petroleum distribution system.
However, the disadvantage is that the conclusions of the inspection, examination and investigation agencies have not been properly implemented. The actual amount of gasoline consumed in the market cannot be accurately determined when traders buy and sell to each other, creating "fake" data on the amount of gasoline consumed in the market.
"Petroleum is a conditional business item. When a business participates in the petroleum business, it must ensure that it meets the requirements set forth by the State management agency," said Ms. Hien.
Need to move towards market mechanism
Regarding the issue of distributors not being allowed to buy and sell to each other, Mr. Dau Anh Tuan - Deputy General Secretary of the Vietnam Federation of Commerce and Industry (VCCI) said that this is likely to violate the provisions of the Law on Enterprises, the Law on Commerce, and the Law on Competition, while we always aim for businesses to have autonomy and self-responsibility.
"The VCCI's view is that the regulation that distributors can only buy and sell from wholesale traders and cannot buy and sell gasoline from each other is not advisable," Mr. Tuan shared.
In reviewing the content of the draft Decree on petroleum business, the Ministry of Justice pointed out many issues that need to be clarified, including those related to the law on business competition.
The draft Decree stipulates that "petroleum distributors are allowed to buy petrol from key petrol traders". However, these traders are "not allowed to buy and sell petrol with each other".
"The above limitation will in principle limit the choice of gasoline supply sources for gasoline distributors, which may not be consistent with the State's policy on competition in Clause 2, Article 6 of the 2018 Competition Law," the Ministry of Justice commented.
Clause 2, Article 6 of the Competition Law 2018 stipulates: "Promote competition, ensure the right to freedom of competition in business of enterprises according to the provisions of law".
With the above provisions, the Ministry of Justice notes that the proposal in the petroleum decree for the above-mentioned distributors can be determined as an act of hindering competition in the market which is strictly prohibited as stated in Point a, Clause 1, Article 8 of the Competition Law.
