Thursday , June 13 2024

Gasoline retailers want wholesalers’ monopoly scrapped


The government should allow them to buy from three sources just like wholesalers to avoid shortages, a group of 250 gasoline retailers has petitioned.

In their urgent petition to the Government Office on Friday, the 250, who run nearly 9,000 gas stations across the country, said existing regulations have caused them heavy losses and they are financially exhausted.

The petition also calls for amending the formula for calculating the base price of fuels and commissions to ensure fairness and stop retailers from having to sell at a loss or close down and attract sanctions from authorities.

Permitting retailers to buy fuels from only one source will eventually destroy competition in the petroleum businesses,” Le Van Bau, director of Le Hong Thu Company, said.

Huynh Tran Thanh Phong, director of Huy Phi Long Company, said since September 2021 his company has suffered losses of VND500 million (nearly US$21,200) because of low commissions.

It gets VND100-200 ($0.4-0.8 cents) per liter of gasoline but costs are high, he said. “If this situation continues, our company will have to shut down,” he said in the petition.

Hundreds of other businesses also said they were racking up heavy losses, some to the tune of tens of billions of dong (VND10 billion = $426,439).

A petition sent by 250 gasoline retailers to the Government Office on February 3, 2023 seeking changes to regulations. Photo by Linh Dan

A petition sent by 250 gasoline retailers to the Government Office on February 3, 2023 seeking changes to regulations. Photo by Linh Dan

Meanwhile, fuel suppliers are both wholesalers and retailers, and so reduce commissions for retailers when the market. “I suggest a fixed commission of at least 5% of retail prices,” Giang Chan Tay, director of Boi Ngoc Company, said.

The Ministry of Industry and Trade has recommended allowing retailers to source fuels from two or three sources to increase their bargaining power when negotiating prices with wholesalers.

But it refused to endorse minimum commission rates saying retailers should negotiate them while signing contracts.

There are 17,000 gas stations in the country, 3,000 of them owned by two public enterprises.

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