Many people fill up at Petrolimex gas station in Tran Hung Dao Street in District 5, HCMC. (Photo: SGGP)
Production plan influenced
Mr. Tran Viet Anh, General Director of Nam Thai Son Import-Export Trading Company, Vice Chairman of Ho Chi Minh City Union of Business Association, said that the time gasoline prices increased coincided with the time businesses faced labor shortage. Therefore, many enterprises have actively reduced their production scale, seriously affecting production recovery plans in the near future.
Many businesses worried that an increase in gasoline prices would lead to an increase in raw material prices. Mr. Nguyen Van Be, Chairman of the Hepza Business Association, emphasized that petrol costs only account for about 2-3 percent of the product cost structure. However, raw material prices account for 80 percent of product costs. According to the chain effect, the increase in gasoline prices can push up the prices of imported raw materials.
Mr. Nguyen Phuong Dong, CEO of Saigon Industry Corporation, emphasized that the corporation and its member businesses had received notices of increasing raw material prices from suppliers. The proposed increase in the coming time would be 5-10 percent. It has been putting enterprises in a difficult position because export and domestic supply orders had been closed before Tet and could not raise prices in the current context.
Amid the current situation of increasing gasoline prices, enterprises reduce production capacity on the one hand. On the other hand, they have been renegotiating with their partners. According to enterprises, to minimize the difficulties they are burdened with, the Government needs to regulate and reduce taxes and fees in gasoline price structure to share the burden with businesses. On the other hand, the Government should increase petrol reserves to stabilize selling prices, as well as avoid the risk of supply disruption.
Using tax and fee tools to control prices
Reporting at the press briefing of the Central Propaganda Department on February 22, the representative of the Ministry of Industry and Trade said that petroleum wholesale enterprises had been actively importing petrol to ensure enough fuel for the domestic market, making up for the shortfall in domestic supply because Nghi Son Oil Refinery reduced its output compared to the plan.
Data of the General Department of Vietnam Customs and reports of key fuel wholesalers show that the volume of petrol imports in the first 15 days of February 2022 by key wholesalers has reached 803,000 cubic meters to ensure supply to the market according to the registered plan. In March 2022, the domestic supply of petroleum products to the market may still be low compared to normal months because the supply of goods from domestic production decreases sharply in February and early March.
However, the inventory transferred from February will still be guaranteed. Besides, Nghi Son Oil Refinery has planned to operate at 85 percent of its capacity from March 15 and at 100 percent capacity from the beginning of April. At the same time, key fuel wholesalers continue to have plans to import gasoline for compensation, so the gasoline supply will not be short. “With such a situation of petrol supply, together with the inspection, market control, and the adjustment of petrol prices closely following the global market price movements, the local shortage of petrol will soon be solved. The supply and demand of petrol products for the domestic market in the coming time will be basically stable," said a representative of the Ministry of Industry and Trade.
Regarding the risk of gasoline prices climbing higher, affecting the lives and production activities of people and businesses, the Ministry of Industry and Trade said that tax and fee tools would possibly be used to stabilize gasoline prices. The ministry would also strictly handle fuel traders if they hoard goods, waiting for prices to increase.
Specifically, in Ha Tinh Province, on the afternoon of February 22, Mr. Vo Viet Linh, Head of the Market Surveillance Team No.5 under the Market Surveillance Department of Ha Tinh Province, said that he had fined Bao Duy Ha Tinh Trading and Service Company’s Son Linh gas station in Son Linh Commune in Huong Son District VND15 million. Previously, the authorities had imposed a fine of VND30 million for Son Tra petrol station in Village 5, Son Tra Commune, Huong Son District of Huong Huyen Limited Company. Both gas stations stopped gasoline sales without being approved in writing by the competent State management agency in accordance with regulations.
Mr. Tran Viet Anh, General Director of Nam Thai Son Import-Export Trading Company, Vice Chairman of Ho Chi Minh City Union of Business Association, said that the time gasoline prices increased coincided with the time businesses faced labor shortage. Therefore, many enterprises have actively reduced their production scale, seriously affecting production recovery plans in the near future.
Many businesses worried that an increase in gasoline prices would lead to an increase in raw material prices. Mr. Nguyen Van Be, Chairman of the Hepza Business Association, emphasized that petrol costs only account for about 2-3 percent of the product cost structure. However, raw material prices account for 80 percent of product costs. According to the chain effect, the increase in gasoline prices can push up the prices of imported raw materials.
Mr. Nguyen Phuong Dong, CEO of Saigon Industry Corporation, emphasized that the corporation and its member businesses had received notices of increasing raw material prices from suppliers. The proposed increase in the coming time would be 5-10 percent. It has been putting enterprises in a difficult position because export and domestic supply orders had been closed before Tet and could not raise prices in the current context.
Amid the current situation of increasing gasoline prices, enterprises reduce production capacity on the one hand. On the other hand, they have been renegotiating with their partners. According to enterprises, to minimize the difficulties they are burdened with, the Government needs to regulate and reduce taxes and fees in gasoline price structure to share the burden with businesses. On the other hand, the Government should increase petrol reserves to stabilize selling prices, as well as avoid the risk of supply disruption.
Using tax and fee tools to control prices
Reporting at the press briefing of the Central Propaganda Department on February 22, the representative of the Ministry of Industry and Trade said that petroleum wholesale enterprises had been actively importing petrol to ensure enough fuel for the domestic market, making up for the shortfall in domestic supply because Nghi Son Oil Refinery reduced its output compared to the plan.
Data of the General Department of Vietnam Customs and reports of key fuel wholesalers show that the volume of petrol imports in the first 15 days of February 2022 by key wholesalers has reached 803,000 cubic meters to ensure supply to the market according to the registered plan. In March 2022, the domestic supply of petroleum products to the market may still be low compared to normal months because the supply of goods from domestic production decreases sharply in February and early March.
However, the inventory transferred from February will still be guaranteed. Besides, Nghi Son Oil Refinery has planned to operate at 85 percent of its capacity from March 15 and at 100 percent capacity from the beginning of April. At the same time, key fuel wholesalers continue to have plans to import gasoline for compensation, so the gasoline supply will not be short. “With such a situation of petrol supply, together with the inspection, market control, and the adjustment of petrol prices closely following the global market price movements, the local shortage of petrol will soon be solved. The supply and demand of petrol products for the domestic market in the coming time will be basically stable," said a representative of the Ministry of Industry and Trade.
Regarding the risk of gasoline prices climbing higher, affecting the lives and production activities of people and businesses, the Ministry of Industry and Trade said that tax and fee tools would possibly be used to stabilize gasoline prices. The ministry would also strictly handle fuel traders if they hoard goods, waiting for prices to increase.
Specifically, in Ha Tinh Province, on the afternoon of February 22, Mr. Vo Viet Linh, Head of the Market Surveillance Team No.5 under the Market Surveillance Department of Ha Tinh Province, said that he had fined Bao Duy Ha Tinh Trading and Service Company’s Son Linh gas station in Son Linh Commune in Huong Son District VND15 million. Previously, the authorities had imposed a fine of VND30 million for Son Tra petrol station in Village 5, Son Tra Commune, Huong Son District of Huong Huyen Limited Company. Both gas stations stopped gasoline sales without being approved in writing by the competent State management agency in accordance with regulations.
Launching investigation against smuggling of petrol and coal
On the afternoon of February 22, the General Department of Vietnam Customs informed that it had directed the Anti-Smuggling Investigation Department and local Customs Departments to focus on grasping the situation, deploying operations to control and fight against petrol, oil, and coal smuggling activities on border and sea areas; clearly define collective and individual responsibilities for letting smuggling, commercial fraud, and counterfeiting of petroleum and coal products take place complicatedly and long in the managing area without proposing measures to counter and prevent.
On the afternoon of February 22, the General Department of Vietnam Customs informed that it had directed the Anti-Smuggling Investigation Department and local Customs Departments to focus on grasping the situation, deploying operations to control and fight against petrol, oil, and coal smuggling activities on border and sea areas; clearly define collective and individual responsibilities for letting smuggling, commercial fraud, and counterfeiting of petroleum and coal products take place complicatedly and long in the managing area without proposing measures to counter and prevent.
Auction of 102 million liters of RON92 gasoline
To ensure petrol supply to the market, the Ministry of Industry and Trade has just consulted the Ministry of Finance and the Ministry of Planning and Investment on auctioning a consignment of national reserve gasoline in the storage of three enterprises, namely Vietnam National Petroleum Group (Petrolimex), Vietnam Oil Corporation (PVOil), and Dong Thap Petroleum Trading Import Export Joint Stock Company. Accordingly, there will be an auction of about 102 million liters of RON92 gasoline used to make E5 RON92 biofuel, with a starting price of VND14,058 per liter. The lowest amount of money collected is expected to be over VND1.43 trillion. The auction is expected to take place at the end of February.
To ensure petrol supply to the market, the Ministry of Industry and Trade has just consulted the Ministry of Finance and the Ministry of Planning and Investment on auctioning a consignment of national reserve gasoline in the storage of three enterprises, namely Vietnam National Petroleum Group (Petrolimex), Vietnam Oil Corporation (PVOil), and Dong Thap Petroleum Trading Import Export Joint Stock Company. Accordingly, there will be an auction of about 102 million liters of RON92 gasoline used to make E5 RON92 biofuel, with a starting price of VND14,058 per liter. The lowest amount of money collected is expected to be over VND1.43 trillion. The auction is expected to take place at the end of February.
