Deputy Head of Domestic Market Department Nguyen Thuy Hien talks about amending the petroleum decree

Ms. Nguyen Thuy Hien - Deputy Director of Domestic Market Department - Ministry of Industry and Trade shared with reporters of Industry and Trade Newspaper.

Ms. Nguyen Thuy Hien - Deputy Director of Domestic Market Department - Ministry of Industry and Trade

Madam, the Ministry of Industry and Trade is currently collecting opinions from ministries, branches and enterprises to complete the Draft Decree on Petroleum Business, amended from Decrees 83, 95 and 80 of the Government, in order to have the most suitable plan for regulating petroleum business and conditions for petroleum business in Vietnam in the current situation. Could you please tell us about the new points of the Draft Decree on Petroleum Business in ensuring petroleum supply as well as transparency in petroleum business management?

To ensure publicity and transparency in the management of petroleum business activities, this draft clearly defines the goal of contributing to ensuring energy security and the management principle is according to the market mechanism, with state management, harmonizing the interests of enterprises, the state, and consumers of petroleum business.

Regarding new points in the draft Decree, there are 6 new points:

Firstly, regarding the mechanism for managing gasoline and oil, the draft Decree has provided a formula for businesses to calculate themselves and then businesses self-announce and declare prices to the management agency for monitoring by the management agency.

Second is the Petroleum Price Stabilization Fund. The draft Decree stipulates that the Petroleum Price Stabilization Fund is implemented according to the 2023 Price Law. The Price Law also stipulates cases and measures for implementing price stabilization.

Third , some conditions are added to the petroleum wholesaler enterprises. Specifically, wholesaler enterprises must have at least 36 months of experience when participating in the market; connect to the network with the state management agency so that the management agency can monitor the total supply and inventory of the enterprise. Enterprises must also ensure a minimum total source of 100,000 m3, tons/year.

Fourth, the Draft Decree eliminates the regulation that distributors must reserve gasoline for 5 days, and eliminates some regulations on storage facilities...

Fifth, to avoid buying and selling through many intermediary levels, distributors are required not to buy and sell gasoline from each other.

Sixth, the Draft Decree removes the regulation on petroleum business services because after review, petroleum business services are not a conditional business item, so we remove it.

The draft Decree on petroleum business will have many new points (Photo: Can Dung)

According to the preliminary report of the Ministry of Industry and Trade, there are currently more than 30 key traders. This is where the source of imported gasoline and oil is created, purchased from factories, put into their own distribution system and sold to other distributors. In addition, there are nearly 280 traders participating in the distribution stage, with the right to buy from all key traders without restrictions to sell in their retail system. These nearly 280 enterprises help the market become more vibrant and competitive. But how should we anticipate the risks, madam?

In recent times, the implementation of the Party's viewpoints and guidelines on mechanisms and policies in petroleum trading has created conditions for economic sectors to participate in petroleum supply. Many distributors have developed and they have contributed to ensuring the supply of petroleum for domestic use.

However, the activities of distributors in recent times have also been pointed out by inspection, examination and investigation agencies as some points that need to be corrected.

Firstly, when allowing traders to distribute and trade with each other, it will create a layer of intermediaries and thereby increase costs. That is the reason why discounts at retail stages are low and do not encourage retail sales to the market.

Second , the mutual trading of gasoline has actually created virtual consumption, making it impossible for state management agencies to grasp the total source to manage gasoline supply.

Third, when traders buy and sell to each other, in fact, they also serve the financial business purposes of the enterprise, creating revenue for the petrol distributor to prove financial capacity when borrowing from the bank, not ensuring the right goal of petrol business to serve the consumption needs of the people.

Many people believe that the fact that traders distribute and buy and sell gasoline among themselves makes it difficult for management agencies to grasp the actual supply. What do you think about this?

Recently, the mutual trading of petroleum has at times created virtual consumption, making it impossible for state management agencies to grasp the total source. Meanwhile, if the total source is assigned to key enterprises so that they can proactively buy and sell petroleum domestically or import it, the management agency will be able to monitor the total supply and actual consumption, thereby issuing plans and assigning the total annual source to enterprises to implement, supplying petroleum to the economy, helping to make the market transparent and control the output and input consumption plan.

That is the advantage, however, there are opinions that the regulation that distributors are not allowed to buy gasoline from each other is against the regulations and violates business law, not ensuring market principles. What is your opinion on this issue?

When the draft decree stipulates that distributors are not allowed to buy and sell to each other, some argue that this restricts competition law and does not ensure fairness according to market principles. Distributors claim that they are being discriminated against.

However, petroleum is a conditional business item. When a business participates in petroleum trading, it must ensure that it meets the requirements set forth by the state management agency. In addition, the regulation that petroleum distributors are not allowed to buy and sell petroleum from each other does not eliminate competition because petroleum distributors in their segments still compete with each other normally.

Furthermore, we believe that this regulation also creates conditions for good distributors to strive to move up to a higher level as a wholesale trader in the petroleum business.

Recently, the petroleum market has developed strongly but is still considered to have too many layers, causing costs to increase. So how will the draft Decree on petroleum business overcome this weakness, Madam?

Previously, the petroleum business system included: wholesale traders, distributors, general agents, retail stores, and franchise stores.

According to the Draft Decree on Petroleum Business, we have designed 3 levels in the petroleum business system. Level 1 is the main trader, level 2 is the distributor and level 3 is the retailer. For each level, we also stipulate the conditions for market participation, the rights and obligations of enterprises. When enterprises participate in any segment, they must maintain the conditions, exercise their rights and obligations in that segment.

Implementing the conclusions of the inspection, examination and investigation agencies, at the distribution intermediary stage, we have removed the regulation that traders are allowed to buy and sell with each other, thereby eliminating virtual data in the market. This also helps key traders calculate the actual consumption volume, thereby making specific plans to buy from domestic or imported enterprises. At the same time, it helps state management agencies clearly determine the consumption volume, build a total source to allocate to enterprises with the highest goal of providing enough gasoline for domestic use.

Thank you!

Source: https://congthuong.vn/pho-vu-truong-vu-thi-truong-trong-nuoc-nguyen-thuy-hien-noi-ve-sua-doi-nghi-dinh-xang-dau-350139.html