>> Vietnam seeks proper price regulations for petrol

As part of efforts to correctly implement and monitor petrol pricing regulations, the Ministry of Finance has decided to inspect four major petrol traders.

Transparency urged in petrol trading

The decision was announced at a recent meeting on petrol pricing regulations after several big petrol traders complained about huge losses.

The ministry has set up three inspection groups to check petrol import prices at state-owned Vietnam National Petroleum Corp (Petrolimex), PetroVietnam Oil Corp (PV Oil), Ho Chi Minh City's One-Member Limited Liability Petroleum Company Limited (Saigon Petro) and Dong Thap Petroleum Trading Co Ltd (Petimex).

Inspections will focus on defining price costs for petrol inventories as of August 26, petrol import prices from January 1 to September 15, and factors affecting petrol firm business performances.

The inspection groups will also check recent profits and losses as well as contributions to the petrol price stabilisation fund by the end of September 15.

Petrolimex recently complained of losses of up to VND1.8 trillion (USD86.4 million) in the first eight months of this year. It expects additional losses of VND200 billion (USD9.6 million) in September.

Minister of Finance Vuong Dinh Hue denied the claims, quoting customs statistics. “When the ministry required a gasoline price cut of VND500 in late August this year, several petrol wholesalers were making a profit of over VND1,000 per litre.”

Petrolimex complains

Petrolimex strongly hit back at Hue’s recent comments saying that when the MoF required a petrol price cut of VND500 in late August this year, Petrolimex was making a profit of VND780 per litre.

Petrolimex refutes Minister of Finance claims

Petrolimex CEO Bui Ngoc Bao explained that before the price cut, the firm was incurring a loss of VND58 per litre of octane 95 petrol. He admitted that Petrolimex was making a profit of VND219 per litre of octane 92 petrol at that time.

After the price cut, the firm incurred a loss of VND412 per litre of octane 95 petrol and VND135 per litre of octane 92 petrol. It was making a profit of between VND17 and VND267 per litre of diesel, he claimed.

Bao complained about the negative impact of the hikes in the foreign exchange rates as the firm often paid for its goods a month after delivery.

According to Bao, prices of goods are often fixed after the delivery based on the average price over several days, but are not calculated based on the prices of a specific day in order to avoid global fluctuations.

“When making customs declarations, petrol firms are compelled to state a certain temporary price to finish their customs procedures. The real prices are often different from those quoted in custom declarations. So it’s not true that Petrolimex was making a profit of over VND1,000 per litre before the price cut as outlined in the customs statistics,” he emphasised.