Distribution companies want to source their products from multiple suppliers.
In a letter sent to the Prime Minister, petroleum distribution and retail businesses stated that they were "overlooked" when the Ministry of Industry and Trade drafted a completely new decree on petroleum business.
Mr. Hoang Trung Dung, General Director of the Petroleum Additives and Products Development Joint Stock Company (APP), stated that the current system and model for managing and operating the petroleum market still harbor risks to energy security. Therefore, a reform in thinking, approach, and problem-solving is necessary.
"Lessons can be learned from the previous telecommunications market and the recent electricity market. The breakthrough in management policy that has been and is taking place is the liberalization of business towards competition, gradually reducing the pivotal and dominant role of one or a few key petroleum trading enterprises," Mr. Dung said.
According to Mr. Dung, it is necessary to liberalize, without classification or discrimination, and to respect the autonomy of businesses in choosing their organizational structure, location, scale, business partners, and service delivery methods based on legal regulations.
"The hierarchical classification of petroleum traders should be abolished, and instead, traders should be given the freedom to conduct business equally, provided they meet the legally stipulated business conditions. Distribution companies should be allowed to purchase goods from multiple sources, including petroleum producers."
"For petroleum distribution companies, it is necessary to separate them into two independent units (import and distribution/retail) to avoid market manipulation and disruption, as the Government Inspectorate concluded in January 2024," Mr. Dung said.
The petroleum retail business community believes that the new Decree on petroleum business should consider abolishing several other inadequacies related to licensing conditions, fire safety regulations, and environmental protection regulations that hinder, affect, and cost businesses, as many procedures are deemed unnecessary.
The fact that retail businesses obtain fuel from multiple sources also raises new issues regarding measurement and quality in the fuel business. Therefore, regulatory agencies need to specify the level of responsibility for each stage in the measurement and quality control of fuel.
A fuel trading floor is necessary.
Speaking to Lao Dong newspaper, Mr. Vu Vinh Phu, former Deputy Director of the Hanoi Department of Industry and Trade, said that in order for the petroleum market to operate in the most open and transparent manner, a trading floor should be established.
This will create a healthy market where transactions operate according to market principles, with mutual agreement between buyers and sellers, no coercion, and buyers purchasing wherever is cheapest and most convenient. Wholesale and retail prices will be determined by businesses themselves, with profits and losses borne by the businesses. There will be no more favoritism, no more discounts, no price ceilings, and no base price. The use of the price stabilization fund, funded by public money, will be completely abandoned due to its ineffective operation.
"This will also eliminate the interest groups that are currently manipulating the petroleum market. It will remove the 'request and grant' mechanism and promote the development of a market economy. Establishing a trading floor will also help authorities manage product quality, control smuggled goods, counterfeit goods, substandard goods, and unregulated petroleum products," Mr. Phu said.
"When the exchange is established, all businesses must trade there, including the two domestic oil refineries, without exception. When participating in the exchange, businesses need to balance their operations to ensure maximum efficiency; they cannot simply rely on the 'financial support' from the State," Mr. Phu said.
Source: https://laodong.vn/kinh-doanh/can-som-lap-san-giao-dich-linh-vuc-kinh-doanh-xang-dau-1359081.ldo
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