"Big guy" of petroleum makes huge profits

Profit exceeded plan

Vietnam National Petroleum Group (Petrolimex) has just sent a document explaining the audited financial report for the first 6 months of 2024 to the State Securities Commission and the Ho Chi Minh City Stock Exchange.

According to Petrolimex, in the first 6 months of 2024, the parent company's after-tax profit reached nearly VND1,530 billion, up 135% over the same period last year. The reason is that petroleum business activities in the first half of this year were basically stable, effective and sales volume increased compared to the same period in 2023.

Petrolimex said that in the first half of the year, the world's energy supply and oil prices did not fluctuate as much as in previous years. At the same time, the stable supply of gasoline from domestic refineries also helped traders import on schedule, ensuring efficiency.

In addition, the company's financial operating profit increased compared to the same period last year mainly due to higher dividends and profits shared from subsidiaries, joint ventures and associates than the same period.

Vietnam National Petroleum Group - Petrolimex achieved impressive profits in the first 6 months of 2024. Photo: Nguyen Anh

Also in the fuel industry, the business results of the Vietnam Oil and Gas Group (PVN) in the first 7 months were quite impressive with the total revenue of the group estimated at VND567,400 billion, exceeding the plan by 31%; PVN's consolidated profit reached VND29,600 billion, exceeding the plan by 75%.

Previously, Vietnam Oil Corporation (PVOil) - the owner of 2,200 gas stations (including 700 affiliated gas stations and 1,500 dealer gas stations) also reported that the company's consolidated pre-tax profit in the first two quarters of the year reached VND390 billion, exceeding the plan by 6%; consolidated revenue reached VND64,000 billion, exceeding the plan for the first 6 months by 54%.

Some small businesses leave the market

While some key petroleum businesses make huge profits, some small businesses, retail and petroleum distribution businesses choose to leave the market.

The Ministry of Industry and Trade said that up to 16 petroleum enterprises have requested to return their petroleum distribution licenses since the beginning of the year. The reason is that these enterprises have not maintained sufficient operating conditions, so they proactively returned their licenses and continue to trade petroleum in the form of agents, retail stores or doing business in other fields.

However, many petroleum businesses believe that the number of businesses leaving the petroleum market is not just 16 but is much larger.

The reason is that the draft amendments to the decrees on petroleum business being developed and consulted by the Ministry of Industry and Trade include provisions that could limit the business rights of distribution enterprises and further tighten their business operations.

Mr. Van Tan Phung - Chairman of the Board of Directors of Dong Nai Petroleum Trading Joint Stock Company said that in the past two years, especially after the time when the supply of gasoline was disrupted in many areas, many gasoline retail businesses had to close down en masse.

Mr. Phung said that currently, key enterprises are being given too many "favors", being allowed to import, buy and sell with each other, and sell to retail agents.

"We see that petroleum businesses do not have equal conditions to compete fairly in the market, especially in the relationship between key businesses, distribution businesses and retail businesses," he said.

The business is considered "unequal" between stages in the petroleum business system, also recognized by Mr. Nguyen Xuan Thang, Director of Hai Au Phat Petroleum Company Limited.

That is the reason why Mr. Thang suggested that it is necessary to separate the levels of wholesale traders, distributors, agents - stores for independent tax declaration and accounting, to ensure the correct and complete representation of costs and profits of each stage in the system of wholesale traders to prevent transfer pricing and tax evasion.

Source: https://laodong.vn/kinh-doanh/ong-lon-xang-dau-lai-khung-1388327.ldo