Cut out the middleman in gasoline distribution

Allowing petroleum distributors to buy petroleum from each other creates many intermediary levels in the distribution process, increasing costs and is one of the reasons for low retail discounts.

Allowing petroleum distributors to buy petroleum from each other creates many intermediary levels in the distribution process, increasing costs and is one of the reasons for low retail discounts.

Mr. Phan Van Chinh, Director of the Domestic Market Department, further clarified the content of the draft Decree on petroleum business.

The regulation that distributors are not allowed to buy and sell gasoline from each other is a controversial content in the draft Decree on gasoline business.

Responding to this content at the regular press conference of the third quarter of 2024 of the Ministry of Industry and Trade, Mr. Phan Van Chinh, Director of the Domestic Market Department, said: "The draft Decree replacing the Decrees on petroleum trading stipulates that distributors are not allowed to buy and sell petroleum with each other to ensure effective management and cut down on intermediaries, reducing costs."

“This regulation was issued after inspections, examinations and investigations by competent authorities and then recommendations to the Ministry of Industry and Trade and the Government. Based on the opinions of ministries and branches, the Ministry of Industry and Trade has drafted a Decree with such content, the regulation ensures that petroleum management gradually moves towards the market but must cut out intermediaries to reduce costs ,” Mr. Chinh explained.

The current petroleum supply chain has 3 levels, including: Source stage (lead); distribution enterprise; retail enterprise. In Decree No. 80/2023/ND-CP of the Government amending and supplementing a number of articles of Decree No. 95/2021/ND-CP dated November 1, 2021 and Decree No. 83/2014/ND-CP dated September 3, 2014 of the Government on petroleum trading, the Government has approved the elimination of intermediary stages such as general agents.

“Implement management along the straight chain, not the horizontal chain,” Mr. Chinh emphasized. At the same time, the conditions to become a distributor and a retailer are completely different. In each segment, the business must meet the conditions of that segment, without discrimination.

According to the Domestic Market Department, the regulation that petroleum distributors are not allowed to buy and sell petroleum from each other does not eliminate competition in the market, but helps eliminate "virtual" data on the amount of petroleum consumed, reducing intermediaries.

A new point of the draft Decree is to diversify the retail segment. “Even the hanging of signs and logos is agreed upon by the two businesses according to the provisions of the law, the state does not interfere,” Mr. Chinh informed.

During the process of drafting this Decree, the Ministry of Industry and Trade organized many conferences and discussions to collect comments. The Ministry of Industry and Trade will develop two options for distributors and seek comments from members of the Government. With 30 current focal points, it is possible to create a competitive market in the petroleum business sector.

In addition, for the subject of gasoline distributors, the draft Decree has reviewed and removed many conditions, such as: Eliminating the regulation that distributors must reserve gasoline for 5 days, eliminating some regulations on storage...

On the contrary, the petroleum wholesaler increases the conditions to attach the responsibility of the wholesaler and create sources for distribution activities. Along with that is the application of digitalization in the control of the entire petroleum supply chain more easily and effectively.

Source: https://baodautu.vn/cat-bo-bot-khau-trung-gian-trong-phan-phoi-xang-dau-d228233.html