Proposed updates in the draft decree on petroleum business will foster price competition and prevent primary distributors from completely dominating retail prices, stated Nguyen Thuy Hien, Deputy Director of the Domestic Markets Department at the Ministry of Industry and Trade's press briefing on October 7 afternoon.
Deputy Director Nguyen Thuy Hien said that the draft decree is not designed to grant price-setting authority exclusively to primary distributors. Instead, both primary distributors and independent secondary distributors will have the right to set selling prices, creating a mechanism that drives price competition among businesses.
According to the official, the draft seeks to simplify the petroleum distribution network by cutting the number of intermediary tiers from three to two. Under the proposed framework, calculations by the Ministry of Industry and Trade suggest that more than 10,500 distributors would be eligible to participate in the market and independently set fuel prices.
Under this proposed model, Hien emphasized that primary distributors will have to compete with secondary distributors, particularly in regions where secondary distributors operate their own networks and market segments. Consequently, complete price manipulation by primary distributors is unlikely to occur.
Addressing concerns over potential price-collusion, Hien stated that during the drafting process, the Ministry of Industry and Trade incorporated feedback by adding provisions to address anti-competitive agreements and unfair trade practices in accordance with the Law on Competition.
The draft decree on petroleum business (amended) is being developed by the Ministry of Industry and Trade to enhance market orientation, reduce intermediary steps, and grant enterprises greater autonomy over pricing. The ministry has gathered broad public feedback on the draft and is finalizing it for submission to the Government.
