Low imports cause gasoline shortage

Commissions for retailers being cut amidst fluctuating world prices is also a factor, Hai told the press reporters Tuesday. Fuel retailers said they are suffering losses after their commissions were adjusted downward and many want to close down.

Wholesalers were importing gasoline and oil when their global prices surged, sometimes by 57-85% against the same period last year, but they had to sell it at lower prices.

Currently, Vietnamese authorities adjust fuel retail prices every 10 days based on the average prices of the previous 10 days. However, many people including lawmakers have said this cycle is no longer suitable because it leaves domestic prices outdated compared to global prices, which have been unstable of late.

Hai said wholesalers have to cover different costs like freight to bring imported gasoline and oil to Vietnam or to transport domestically produced fuels to ports nationwide, but the costs used by the ministry to calculate the base price are smaller than actual costs borne by the wholesalers.

For these reasons, wholesalers have incurred losses, so they cut back on imports and slashed commissions for retailers, he said.

Some other reasons for the partial fuel shortage include lower production by two domestic refineries and the absence of some wholesalers, Hai said.

The two refineries produced 9.7 million tons of gasoline and oil in the first 10 months, some 170,000 tons lower than the yearly plan, according to the Ministry of Industry and Trade.

Several wholesalers in the south have had their business licenses revoked for administrative wrongdoings, and some others have had customs clearance of imported fuel suspended for failing to meet customs-related requirements like electronic data connections.

The Ministry of Finance has agreed to factor in an increase in the transportation cost of importing fuel, which will enable a hike in retail prices.

The costs is VND290-560 (1.2-2.3 cents) higher for a liter of gas and VND160-660 for diesel, and reflected in retail prices from Nov. 11.

Another solution is increasing national gasoline and oil reserves, Hai said, noting that current reserves were equivalent to just 5-7 days of consumption.