Editor's note: Tax debts, tax evasion, smuggling, appropriation of the Petroleum Price Stabilization Fund... are the dark corners of many petroleum key enterprises. The fact that these enterprises with weak business capacity are allowed to slip through is believed to be largely due to the licensing process.
The series of articles "The hidden corners of the petroleum 'giants'" produced by VietNamNet hopes to contribute more voices to the health and screening of the petroleum market, to protect consumer rights, the development of legitimate petroleum businesses, and to ensure national energy security.
A series of businesses misappropriated the Stabilization Fund
When Xuyen Viet Oil was under the radar of authorities, it was also when the company was discovered to be "hiding" hundreds of billions of dong from the Petroleum Price Stabilization Fund.
However, now that the leaders of Xuyen Viet Oil have been arrested, the possibility of recovering the money contributed by people when buying gasoline from Xuyen Viet Oil is increasingly fragile.
But Xuyen Viet Oil is not an isolated case of "holding" this Fund!
In 2022, the Ministry of Industry and Trade struggled to urge Thai Son BQP Petroleum Joint Stock Company (Da Kao Ward, District 1, Ho Chi Minh City) and Duong Dong - Hoa Phu Joint Stock Company (Hoa Phu Commune, Tuy Phong District, Binh Thuan Province) to pay the balance of the Petroleum Price Stabilization Fund to the state budget. The reason is that these enterprises had their licenses as petroleum wholesale traders revoked.
However, after many times of urging, the Ministry of Industry and Trade and the Ministry of Finance did not receive any response to the report and documents of Thai Son BQP Petroleum Joint Stock Company regarding the payment of more than VND 21.76 billion to the state budget; while Duong Dong - Hoa Phu Joint Stock Company did not pay more than VND 3.76 billion.
After the enterprises failed to pay money to the state budget, the Ministry of Industry and Trade and the Ministry of Finance agreed to transfer the files of the two companies to the Ministry of Public Security for investigation and handling according to regulations.
However, this may not have much significance in collecting the Fund, when previously, a series of leaders of Duong Dong - Hoa Phu Joint Stock Company were prosecuted for smuggling gasoline (in 2022). The founder of Thai Son BQP Petroleum Joint Stock Company, Dinh Ngoc He (aka Ut Troc), was also prosecuted for many other crimes.
Similarly, in a recent case, the Department of Investigation Police on Corruption, Economic Crimes, and Smuggling, Ministry of Public Security prosecuted a number of leaders of Bach Khoa Viet Company. In the announcement, the Ministry of Public Security briefly stated that the leaders of Bach Khoa Viet were prosecuted for "Violating regulations on management and use of state assets, causing loss and waste".
However, according to VTV, as a key petroleum enterprise, Bach Khoa Viet Company must provide goods to petroleum trading units, but in reality, due to lack of capacity and conditions, this company must sign a fake sales contract with retail enterprises.
According to regulations, based on the amount of gasoline consumed and the management document of the Ministry of Industry and Trade, enterprises must have the obligation to set aside a gasoline price stabilization fund (Bach Khoa Viet, before its gasoline import-export business license was revoked, was also a key enterprise and had to set aside a stabilization fund according to regulations - PV).
However, Bach Khoa Viet has only set aside a portion of the money, the company has appropriated the remaining amount for illegal spending and paying off loans.
"Ignoring" the auditor's warning
The incident of petroleum enterprises misappropriating the Price Stabilization Fund might not have happened if the management agency had researched and strictly implemented the conclusion of the State Audit.
In 2017, the State Audit issued a thematic audit report on the establishment, management and use of the Petroleum Price Stabilization Fund and the management and operation of petroleum prices in the 2015-2016 period.
This conclusion points out a number of “loopholes” in the use and management of the Price Stabilization Fund. That is, many key enterprises have not announced the amount of deductions, usage and balance of the Fund monthly and before each price adjustment; have not provided documents proving that they have reported to the Ministry of Industry and Trade (Domestic Market Department) the situation (balance, deductions, usage, interest arising from the Fund on the 25th of each month and summarized the report at the end of the fiscal year to the Ministry of Finance - Industry and Trade as prescribed).
At that time, the State Audit also warned that there was a situation where money from the Price Stabilization Fund had not been transferred to a separate bank account. Nam Song Hau Company was named by the auditor.
The role and effectiveness of the formation and use of the Petroleum Price Stabilization Fund have certain limitations due to the limited management of the Fund by competent authorities, the State Audit Office commented.
Previously, in 2011, the State Audit also completed an audit of the allocation, management and use of the Petroleum Price Stabilization Fund. “Leaving the Fund at enterprises has limitations in terms of transparency, is easily abused by enterprises for other purposes, and poses high risks to the Fund without preventive measures, and cannot separate the profits from the Fund,” the Audit noted.
The warnings of the State Audit in 2011 and 2017 came true when violations related to the Price Stabilization Fund were exposed as mentioned above. The number of key traders who publicly disclosed the fund as prescribed on the website was mostly state-owned enterprises; many key traders did not even have a website.
"Everything needs transparency"
According to current regulations, the Petroleum Price Stabilization Fund is established at the enterprise. The main petroleum traders are responsible for setting up, spending, reporting, publicizing the Fund and managing the Fund according to regulations.
Key traders of petroleum are responsible for selecting and opening a separate account to monitor the Petroleum Price Stabilization Fund at a bank; are responsible for notifying in writing the name, address, and contact information of that bank to the Ministry of Finance (Price Management Department), the Ministry of Industry and Trade (Domestic Market Department) and disclosing information according to regulations.
Circular No. 103/2021/TT-BTC of the Ministry of Finance stipulates: Key traders of petroleum business are fully responsible before the law for the implementation of provisions, spending, reporting and management of the Petroleum Price Stabilization Fund.
The responsibility for managing the Fund belongs to two Ministries: Industry and Trade and Finance. The provisions in this Circular demonstrate the important role of the Ministry of Industry and Trade in setting up the Fund based on the opinions of the Ministry of Finance. In case the two Ministries have different opinions, the Ministry of Industry and Trade shall issue a decision to apply.
Periodically, before the 15th of each month, the main petroleum traders are responsible for preparing and sending reports to the Ministry of Finance and the Ministry of Industry and Trade on the implementation of the Petroleum Price Stabilization Fund of the previous month. If necessary, according to the requirements of state management or according to the annual information gathering plan, the Ministry of Finance shall coordinate with the Ministry of Industry and Trade to organize work, exchange and inspect directly at the unit.
Mr. Van Cong That, director of a petroleum retail company in Ho Chi Minh City, said: Only the authorities can tell whether the bank account has money left to set up the fund or not.
Management, supervision and post-audit related to the Fund are not too difficult if we are determined to do it.
The inspection of all accounts of the Petroleum Price Stabilization Fund at key enterprises will clarify and answer consumers' concerns about this fund, thereby helping to "clear the name" of key enterprises that do business seriously.
"Everything needs transparency," Mr. Van Cong That emphasized.
Lesson 3: Establishing a series of low-capacity petroleum key enterprises just to be 'backyards'
When the draft Law on Prices (amended) was first put out for comments, the Ministry of Finance proposed to abolish the Petroleum Price Stabilization Fund. However, at that time, the leaders of the Ministry of Industry and Trade said that abolishing the Fund would lead to no longer having a legal basis for allocating and using the Fund in the Government's decrees. Therefore, the Ministry proposed to add content on the Price Stabilization Fund and assign the Government to specify the establishment, management and use of the Fund to have a basis for implementation.
The recently amended Law on Prices also reflects this spirit. However, when examining the law, the National Assembly's Finance and Budget Committee noted that the Government needs to promote openness and transparency regarding the status of resources and the use of funds.
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