Petrol distributors not allowed to buy from each other: Draft

A petrol station of Petrolimex, a petrol wholesaler. As of June 2024, Việt Nam had 298 petrol distributors and over 30 petrol wholesalers. — VNA/VNS Photo

HÀ NỘI — A new draft to amend the decree on trading petroleum, compiled by the Ministry of Industry and Trade (MoIT), stipulates that gasoline distributors are not allowed to trade petrol with each other.

The distributors are permitted to buy petrol and gas from wholesalers.

This regulation is not new and it has been specified in Article 15, Section 3, Decree No 83/2014/NĐ-CP on petroleum trading, effective since 2014.

As of June 2024, Việt Nam had 298 petrol distributors and over 30 petrol wholesalers.

With a large number of 298 petrol distributors, if the distributors are allowed to buy from each other, controlling the origin, quality and quantity of petroleum will be very difficult for the State management agencies.

At present, the situation of producing and trading fake petrol, oil and gas is still complex and there have been many recent cases of hundreds of millions of litres of fake petrol.

Experts believe there are many more undiscovered cases, posing potential risks to Việt Nam’s petroleum distribution system and the domestic energy security.

Therefore, the MoIT has proposed that the distributors only buy petrol from wholesalers to strictly control the quality of supply, protect consumers and traders.

In addition, this regulation aims to make the petroleum trading market more transparent, eliminating trading among the distributors which increases costs and retail prices.

Petroleum is a special industry that affects the national energy security. Many economic experts said that in the current multi-level petroleum trading system, each level has its own functions, tasks and business conditions. The businesses need to meet all conditions and requirements, and must properly perform their functions and tasks, avoiding virtual supply.

According to the draft decree on trading petroleum, one of the conditions on becoming wholesalers is to have data connection with the MoIT’s data system on petroleum storage, total petroleum supply, petrol import – export – inventory.

They must have distributed petrol for at least 36 consecutive months, before they are even considered for certification.

If they meet the requirements to become wholesalers, they will be permitted to be allocated a minimum total annual supply of petrol and oil, to import petroleum and raw materials for petroleum preparation and to import and export crude oil.

They are allowed to trade crude oil, petrol and raw materials for mixing petrol and oil with domestic petrol and oil producers and other wholesalers.

The wholesalers need to ensure the petrol supply to be not lower than the minimum total supply assigned by the MoIT.

The Ministry will take wholesalers’ information relating to the quantity and origin of goods to set plans on petrol supply to meet demand of the people and the economy.

The role of petrol wholesalers is to ensure enough petrol supply for the domestic market, which is critical in ensuring national energy security.

Petrol and oil distributors are not subject to these regulations. — VNS