Traders distributing and trading gasoline with each other have many risks.

Ms. Nguyen Thuy Hien - Deputy Director of the Domestic Market Department (Ministry of Industry and Trade) answered the press about the Draft Decree replacing the Decrees on petroleum trading.

Ms. Nguyen Thuy Hien - Deputy Director of the Domestic Market Department (Ministry of Industry and Trade) spoke at the Conference to discuss and reach consensus to complete the draft Decree replacing Decree No. 83/2014/ND-CP on petroleum trading and Decrees amending and supplementing Decree No. 83/2014/ND-CP taking place on the afternoon of October 2.

PV: After a period of development, the petroleum market has had many traders participating in the petroleum market, including distributors. According to the law, how are the activities of petroleum distributors regulated, madam? Ms. Nguyen Thuy Hien : According to current regulations, petroleum is a conditional business item. When participating in the market, traders must meet and maintain conditions and exercise rights and obligations in each segment in which they participate. For distributors, they must currently meet and maintain conditions on facilities serving business activities such as: having 5 affiliated stores, 10 retail agents, having warehouses, tanks, means of transport owned or leased for over 5 years... Regarding rights: they are allowed to buy petroleum from other petroleum wholesalers and petroleum distributors; to trade petroleum in the form of assigning to the affiliated system according to the Commercial Law; to do business under the franchise method; Retail at affiliated stores, sell to units that directly use them for production... Regarding obligations: they must be responsible for the quality, quantity, and selling price on their system; monitor and be responsible for the system registration system, register sales time, comply with fire prevention and fighting regulations... Reporter: It can be seen that with about 300 petroleum distributors, the petroleum market is more developed and competitive. But what are the risks from this market, madam? Ms. Nguyen Thuy Hien: In recent times, implementing the Party's viewpoints and guidelines, the State's mechanisms and legal policies on petroleum trading have created conditions for economic sectors to participate in the supply of petroleum to the domestic market. Many petroleum distributors have been formed and developed to become an important link in the petroleum distribution system, creating a complete distribution system starting from the source creation stage (import, purchase from the factory) - distribution - retail. With the provisions on rights and obligations as stated above, the activities of distributors in the past have revealed a number of points that, through the process of inspection, examination and investigation, inspection, examination and investigation agencies have pointed out: (1) Allowing petroleum distributors to buy petroleum from each other creates many intermediate levels in the distribution stage (secondary market), increasing costs in this stage, which is one of the reasons leading to low discounts at the retail stage, discouraging businesses from selling petroleum to the market. (2) The purchase and sale of petroleum between petroleum distributors in reality causes the same amount of petroleum to be consumed on the market but all are included in the petroleum consumption reports of many petroleum distributors, creating "virtual" consumption figures on the market, causing difficulties for state management agencies in controlling supply and regulating the market. (3) The current practice of gasoline distributors buying and selling gasoline among each other actually serves the financial business purposes of the enterprise, creating revenue for gasoline distributors to demonstrate financial capacity when borrowing from banks, which does not ensure the right goal of gasoline trading to serve the consumption needs of the people. (4) The buying and selling of gasoline among distributors also makes it difficult for banks to manage and control cash flow in circulation.

Ms. Nguyen Thuy Hien - Deputy Director of Domestic Market Department (Ministry of Industry and Trade) - Photo: Phong Lam

PV: Regarding the right to buy and sell gasoline between gasoline distributors. The draft Decree stipulates that distributors are allowed to BUY gasoline from gasoline wholesalers and SELL gasoline to agencies, organizations, and factories to serve production; supply gasoline to gasoline retailers. Thus, distributors are not allowed to buy and sell gasoline with each other. Why is it necessary to clearly regulate the purchase and sale of distributors like that, Madam? Ms. Nguyen Thuy Hien : The draft Decree on gasoline trading has built a gasoline distribution system with 3 levels (segments): Petroleum import and export wholesalers - Petroleum distributors - Petroleum retailers. At the same time, the Draft specifically stipulates the conditions, rights and obligations of traders in each segment. Petroleum is a conditional business item. When participating in the market, businesses need to meet the conditions, exercise the rights and obligations in each segment in which the business participates. Implementing the conclusions of inspection, examination and investigation agencies, reducing the intermediate level in the distribution of petroleum as presented. The draft Decree is designed in the direction of eliminating regulations on the purchase and sale of petroleum between petroleum distributors, eliminating "virtual" data on the amount of petroleum consumed in the market. Thereby: (1) Helping petroleum wholesalers accurately calculate the amount of petroleum consumed domestically to purchase from domestic and foreign manufacturers to serve domestic consumption; (2) State management agencies accurately determine domestic consumption needs to implement the annual allocation of total resources to petroleum wholesalers to ensure supply for domestic consumption. Reporter: There are many opinions that if such regulations are against regulations, violate business laws, do not ensure fairness according to market principles... What is the opinion of the state management agency in response to such opinions? Ms. Nguyen Thuy Hien : Some opinions say that the regulation that petroleum distributors are not allowed to buy and sell petroleum with each other may have factors that limit competition in the market, not ensuring fairness according to market principles, causing reactions from petroleum distributors that they are being discriminated against. However, petroleum trading is a conditional business investment industry, so traders must comply with the conditions when participating in business. The regulation that petroleum distributors are not allowed to buy and sell petroleum with each other does not eliminate competition in the market. Traders in each market segment are still free to compete with each other. At the same time, this regulation also creates motivation for traders to develop towards higher market segments (to become key traders). Reporter : The Ministry of Industry and Trade is finalizing this draft decree to replace 3 Decrees on petroleum trading. What advantages does the draft have in ensuring both the market mechanism and the state management mechanism for this conditional business item? Ms. Nguyen Thuy Hien : To ensure publicity and transparency in management, creating social consensus, the draft Decree clearly defines the management goal as contributing to ensuring national energy security; the management principle is to follow the market mechanism with state management, harmonizing the interests of consumers, enterprises using gasoline and oil and enterprises trading gasoline and oil, reducing intermediaries in the gasoline and oil supply chain. Accordingly, some new points in the draft Decree are: 1. Gasoline price management mechanism The draft Decree provides a formula for gasoline and oil selling prices for enterprises to calculate prices themselves, stipulates that the state publishes price forming factors for enterprises to decide on prices themselves, declare prices and send price declaration documents and price notifications to competent state management agencies for supervision. 2. Stabilizing gasoline prices The draft stipulates that gasoline price stabilization is implemented in accordance with the provisions of the 2023 Law on Prices (effective from July 1, 2024) because the Law on Prices clearly stipulates the list of goods and services subject to price stabilization, cases of stabilization and measures for implementing price stabilization. 3. Supplementing conditions for key gasoline traders - Having worked as a gasoline distributor for at least 36 months so that traders have experience in gasoline trading. - Connecting to the network with the Ministry of Industry and Trade on gasoline storage data, the implementation of total gasoline sources... to control gasoline supply and demand in the market. - Responsible for implementing a total gasoline source of at least 100,000 ^m3 , tons of gasoline in a year. 4. For gasoline distributors The draft Decree removes the regulation that gasoline distributors must reserve gasoline for circulation for 5 days; Remove the conditions on petroleum storage facilities and petroleum quality testing laboratories. In addition, to avoid roundabout trading and creating many intermediary levels, the draft Decree stipulates that petroleum distributors are not allowed to buy and sell petroleum from each other, but are only allowed to buy petroleum from the main petroleum trader (the enterprise responsible for ensuring the supply of petroleum to the market). 5. The draft Decree removes the regulations on petroleum service business because after review, the Investment Law does not stipulate that petroleum service business is a conditional investment and business sector. 6. Petroleum circulation reserves Current regulations on circulation reserves are not clear and specific, leading to confusion in implementation. The draft Decree has more clearly regulated petroleum circulation reserves than before. 7. Administrative reform - Remove the conditions on professional certificates on fire prevention and fighting, environmental protection. Traders are responsible for implementing the provisions of current laws on fire prevention and fighting, and environmental protection during business operations. - Remove the condition of owning or renting means of transporting petroleum because in reality, transporting petroleum is an inevitable step when enterprises put petroleum into circulation. - Remove the requirement for enterprises to provide a Certificate of Business Registration in the application for a Certificate or Certificate of Eligibility. - Do not stipulate the use of signs and trademarks. Instead, the draft Decree stipulates that enterprises must agree on the use of signs and trademarks with each other and comply with the provisions of relevant laws. Reporter: Thank you! Source: https://tapchicongthuong.vn/mot-so-diem-moi-trong-du-thao-nghi-dinh-hay-the-cac-nghi-dinh-ve-kinh-doanh-xang-dau-127632.htm