Do not hinder the freedom of business of petroleum distribution enterprises

    Lê Thanh Phong |

    A series of petroleum distributors have asked to return their licenses because they are not strong enough to compete in the market. The reason is not because they are doing bad business, but because the discount rate for petroleum distributors and petroleum retailers is very low, not enough to cover fixed business costs, causing heavy losses for the businesses.

    In a business environment, of course there are winners and losers, but if a series of businesses are losing money, we need to review the quality of that business environment, or more precisely, the policies for this market.

    Representatives of petroleum distribution units have asked state management agencies to create conditions to cover operating costs. If the discount rate continues to be the same, many traders will ask to return their licenses due to heavy losses.

    Not only calculating a reasonable discount rate, businesses also need appropriate policies to ensure business freedom. Many opinions say that the draft decree on petroleum trading stipulates that distributors are only allowed to buy petroleum from wholesale traders, which is inappropriate, restricting the business rights of businesses and hindering competition in the market.

    Similarly, the draft decree stipulates that redistributors can only buy from a single source, the main trader, and cannot buy and sell with each other, which is an obstacle to the business rights of enterprises. Regarding this provision, the drafters of the decree believe that allowing distributors to buy and sell through many intermediary levels, pushing up the price of gasoline, is not convincing. Because gasoline prices are controlled, not everyone who wants to increase the price like a bunch of fish in the market can increase it. Anyone who increases the price will immediately eliminate themselves from the market.

    Market economy is first and foremost about freedom of business, here distributors must be free to buy and sell gasoline, forcing them to buy only from the main business is against the law of the market. Not to mention, distributors are not allowed to buy and sell with each other, but the main business is allowed, that is inequality in business, is discrimination between the two groups of businesses.

    Creating a free, equal and fair business environment so that all businesses participating in the petroleum market can survive and develop is a good policy. If businesses cannot survive, suffer losses and have to leave the market, then the policy is clearly inappropriate.

    Lê Thanh Phong
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