Are distributors still allowed to buy and sell gasoline from each other?

In response to traders' opinions, the Ministry of Industry and Trade said it would submit an additional plan allowing petrol distributors to buy and sell to each other (as per current regulations), creating conditions to diversify the petrol distribution system.

Are distributors still allowed to buy and sell gasoline from each other?

In response to traders' opinions, the Ministry of Industry and Trade said it would submit an additional plan allowing petrol distributors to buy and sell to each other (as per current regulations), creating conditions to diversify the petrol distribution system.

The draft Decree on petroleum business continues to stipulate that petroleum distributors have the right to buy and sell petroleum with each other.

Regarding the opinion on the right to buy and sell gasoline between distributors in the revised Decree on gasoline business , the Domestic Market Department, Ministry of Industry and Trade has just had new information.

According to the Domestic Market Department, taking into account the opinions of traders, the Ministry will submit to the Government 2 options:

Option 1: The draft Decree stipulates that petroleum distributors are not allowed to buy and sell petroleum with each other, but are only allowed to buy petroleum from key petroleum traders.

The Ministry stated that the advantages of this plan will help eliminate the need to buy and sell gasoline through gasoline distributors, creating “fake” data on the amount of gasoline consumed in the market. This will help state management agencies determine domestic consumption demand, helping to reduce business costs in the supply chain.

The disadvantage is that petroleum distributors are not allowed to buy and sell petroleum with each other, which may limit competition in the market, and petroleum distributors believe that they are discriminated against. However, distributors can completely become wholesale traders if they have the need and meet the regulations.

Option 2: The draft Decree continues to stipulate that petroleum distributors have the right to buy and sell petroleum with each other as it does now.

This plan is in line with the recommendations of petroleum distributors, creating conditions for diversifying the petroleum distribution system.

However, the disadvantage is that the conclusions of the inspection, examination and investigation agencies have not been properly implemented. The actual amount of gasoline consumed in the market cannot be accurately determined when traders buy and sell to each other, creating "fake" data on the amount of gasoline consumed in the market.

At the same time, there is a risk that retail discounts will be low, causing retailers to limit sales to the market due to losses.

The regulation not allowing traders to distribute and buy and sell each other's gasoline is the most controversial content, and the one that traders have expressed the most opinions about in the drafts previously released by the Ministry of Industry and Trade.

Representing the petroleum business community, the Vietnam Federation of Commerce and Industry (VCCI) argued: Not allowing mutual trading of petroleum between distributors to avoid roundabout trading, creating many intermediary levels, pushing up prices... is "baseless and goes against market rules" and restricts the business rights of enterprises.

During the process of collecting opinions on the Draft Decree, many distributors said, "Removing the regulation on buying and selling gasoline between gasoline distributors is to limit the business rights of small and medium-sized enterprises, is discriminatory, and creates business advantages for enterprises with monopoly positions."

Petroleum distributors propose to continue the current regulation that petroleum distributors have the right to buy and sell petroleum with each other.

Because this regulation will create more supply sources for other petroleum distributors and retailers in case the petroleum supply from the main petroleum trader suddenly encounters a problem, while the amount of petroleum purchased by the distributor is still large, in addition, it also creates conditions for diversifying the distribution system, ensuring competitiveness in the market.

According to the Ministry of Industry and Trade, in reality, the fact that petroleum distributors buy and sell petroleum to each other does not create a new supply source for the market because the responsibility for ensuring the supply belongs to the main petroleum traders.

The fact that petroleum distributors are not allowed to buy and sell petroleum to 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.

Furthermore, according to the inspection agency, through the inspection process, allowing petroleum distributors to buy petroleum from each other creates many intermediary levels in the distribution stage (secondary market), increasing costs in this stage, leading to low discounts at the retail stage, and making it difficult to control supply.

Source: https://baodautu.vn/thuong-nhan-phan-phoi-van-duoc-phep-mua-ban-xang-dau-cua-nhau-d230704.html