One of the proposals made by MOIT is shortening the fuel price review cycle from 10 days to seven days, i.e retail prices would be reconsidered and adjusted once every seven days instead of 10.

Under current regulations, fuel prices are reconsidered and adjusted on the first, 11th and 21st days of month. If the days coincide with national holidays, the prices are reconsidered on the next working day after holidays.

Applauding the idea, Hoa Khanh Petroleum said this would benefit both distributors and people. Petroleum prices globally fluctuate all the time and if domestic prices are not adjusted, this causes a lot of problems. The company also wants to reconsider retail prices on specific days, including holidays.

A representative of another enterprise proposed a price adjustment once every five days, on the first, sixth, 11th, 16th, 21st and 26th of month, including holidays. 

“The higher adjustment frequency will allow domestic prices to be in accordance with the world price. The implementation of Decree 95/2021 shows that regulating prices according to a 5-day cycle is absolutely feasible as enterprises are applying automation technology in administration."

Nguyen Tien Thoa, chair of the Vietnam Valuation Association (VVA), also thinks that it is necessary to shorten the fuel price review cycle from 10 days to five days in order to more truly reflect price fluctuations in the world market.

Discount rate

While the proposed changes in the price review cycle have received consensus among experts and involved parties, the discount rate for agents and the regulation on buying products from many different sources has raised controversy. 

MOIT insists on the view that there is no need to fix discount rates for agents.

Meanwhile, Hoa Khanh Petroleum stressed that the regulation is very important.

“It is necessary to set discount rates for agents to be sure that retailers can make a profit. If they cannot make a profit, they won’t be able to maintain operation,” a representative of the company said.

Other companies disagree with Hoa Khanh. They said discount rates will be defined by involved parties themselves after negotiations.

While MOIT proposed that only retail agents are allowed to buy products from one source, Hoa Khanh wants to have more choices. 

If they have two sources, they will be able to choose the source which offers better business terms. 

The company believes that there is no need to worry about the quality of petroleum imports, because state management has become very tight recently.

Meanwhile, other enterprises expressed opposite views. Petroleum is a commodity in liquid form, stored in tanks, mixed and indistinguishable. It is impossible to tell the difference and physically separate imports at different times and from different sources. 

Therefore, if retail agents get products from many sources, goods owners won’t be able to control and supervise the sources of products and the quality of products and will not cannot recognize brands. As such, owners won’t be able to implement rights and obligations about goods as stipulated by the Commercial Law.

Regarding distribution traders, MOIT suggested that they should be allowed to buy products from three sources. 

However, Thoa stressed that the regulation needs to be removed. He said distribution traders may be ‘abandoned’ by wholesalers when there are supply shortages. 

He suggested stipulating that one distribution trader can only buy products from two wholesalers, and they have to register and commit the volume of purchase, and register the networks under their management.

Meanwhile, other people suggested removing distribution traders to reduce the number of intermediaries.

There are 330 distribution traders, who are intermediaries and they can buy products from many sources. As the stability is not high, wholesalers cannot plan their sources.

When the petroleum market became unstable some months, distribution traders nearly did not play any role in stabilizing the market. Many traders don’t have capability, which may lead to risks in quality and trade frauds. The existence of fewer intermediaries will help reduce costs.

Luong Bang