Monday , March 4 2024

Fuel distributors want higher commission as bankruptcy looms

Fuel distributors want a commission of VND1,500 ($0.06) per liter instead of zero as the mounting losses are pushing them to the verge of bankruptcy.

“We invest billions of dong in a gas station but our current profit is less than a grocery store’s,” lamented an owner at a meeting with trade authorities Thursday.

The man, who runs a gas station in Ho Chi Minh City, said, “If the commission continues to stay at zero, we face the risk of bankruptcy.”

Distributors are making this demand as fuel retail commissions have been cut to zero or near zero in recent weeks, and the high import costs are not reflected in retail prices, which are now at their lowest levels this year.

A distributor with 11 gas stations in HCMC said the constantly changing prices of fuel and overheads mean they are selling at a loss.

He sought a commission of VND1,000-1,500 per liter to break even.

The commissions now are VND550-900 for diesel and VND50-100 for RON95 gasoline.

The Ministry of Industry and Trade said this year it has asked the Ministry of Finance four times to include the cost of domestic transport in gasoline retail prices, but in vain.

Bui Ngoc Bao, chairman of the Vietnam Petrol Association, said changes in distributors’ costs could only be reflected in retail prices every six months according to regulations, but prices have been very volatile in recent months, and that is why distributors are making losses.

He said at least another VND400 needs to be added to distributors’ costs for them to break even.

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