Fluctuations in gasoline prices reveal shortcomings

Ships waiting to pick up PVOil's gasoline at Nha Be Petroleum Depot (HCMC) - Photo: TTD

Big names like Petrolimex were also heavily affected. At the shareholders' meeting on April 25, Deputy General Director Tran Ngoc Nam said that the US tariff policy had had a profound impact on the global market and Vietnam, when oil prices after April 2 dropped dramatically from 75 USD/barrel to below 60 USD/barrel, at times plunging more than 20%.

A price adjustment session costs… trillions

Since the imposition of tariffs by US President Donald Trump, gasoline prices have fluctuated sharply, continuously falling and reversing. In such a price context, Petrolimex and other businesses are in a difficult situation due to the regulation on the gasoline business management mechanism that the main traders must maintain a minimum inventory of 20 days.

In addition, every year the Ministry of Industry and Trade assigns a minimum total source target and regulates prices within 7 days. Therefore, with the sharp drop in oil prices in just 3-5 days of up to 20%, causing Petrolimex's inventory according to regulations to fluctuate up to 700,000 - 750,000m3, it has had a huge impact on the group's business activities.

Mr. Nam cited that since the April 10 executive session, the group's revenue "lost" 1,000 billion VND, affecting the company's operating efficiency. With the inventory in the April 17 cycle, this company calculated a loss of about 300 billion VND, affecting revenue.

In the coming time, Mr. Nam commented that the petroleum business has many potential risks when positive and negative information is intertwined, and prices fluctuate uncontrollably. Therefore, the petroleum business results of all traders are forecasted to be unfavorable.

PVOIL representative said that in the first quarter of 2025, the average Brent oil price was only 75.66 USD/barrel, down 9% compared to the same period last year and continued to plummet to 68.93 USD/barrel in the first half of April. The main reason is due to global oversupply and energy and tax policies of major countries, making the market unstable.

Domestically, retail gasoline prices have continuously decreased, demand is low, discounts are high, and exchange rates have increased sharply, causing profit margins to erode. Despite reaching an output of nearly 1.3 million m³/ton (98% of the quarterly plan) and revenue of more than VND33,000 billion, up 11% over the same period, PVOIL said that pre-tax profit almost broke even and decreased sharply compared to the profit of VND299 billion in the same period in 2024.

Squeezing discounts, worrying about risks from slow policy revision

While key businesses have suffered serious declines in revenue and profits due to huge price fluctuations, many gasoline distributors and retailers are also facing difficulties due to "squeezed" discounts.

A petrol retail company in Ho Chi Minh City said that since the adjustment session on April 10 when petrol prices dropped by VND1,000/liter, the discount the company received was only about VND500-600/liter. On April 25, petrol prices increased again, so the discount increased, but the low discount in previous sessions along with the reduced selling price, the market risk in the coming time is still latent.

Speaking to Tuoi Tre, Mr. T. (director of a petroleum retail company in Ho Chi Minh City) said that the discount on April 25 increased by over VND1,000/liter for gasoline, indicating that gasoline prices in the next management session are likely to decrease. Gasoline prices have fluctuated recently, leading to strong fluctuations in domestic retail prices, with the discount at many times only remaining at VND400-500/liter.

With this discount rate, Mr. T. believes that if retail businesses do not rent premises, they will only break even, but if they rent premises, they will suffer losses because the break-even point must reach a discount of 700 - 800 VND/liter of gasoline.

Businesses are increasingly impatient as Decree 95 on petroleum trading and related regulations are slowly being revised, putting them at a disadvantage. The owner of a Petrolimex franchise distributor said that he has repeatedly proposed to revise the decree on petroleum trading, but the draft is still in the process of being commented on by all parties. "We expect the regulations to be revised soon to limit risks when the market fluctuates," he said.

Updating on the amendment of this decree, Mr. Tran Ngoc Nam informed at the Petrolimex shareholders' meeting that the 6th draft has been approved and is currently being sent to traders for comments. In which many new contents have been amended to require more binding for business traders.

The notable point, according to Mr. Nam, is that enterprises that do not connect electronic invoices at the pump with the tax authority will not be allowed to participate in the market. The price adjustment is also expected to give power to key enterprises on the basis that the State only announces the price components and transfers the price stabilization fund to the Ministry of Industry and Trade.

With this amendment, businesses expect to contribute to making the market healthy and ensuring price movements closely follow the market, avoiding major risks in business.

Gasoline price management will be more flexible and closer to the market

At the shareholders' meeting on April 25, Mr. Nguyen Dang Trinh - General Director of PVOIL - said that in April 2025, the enterprise received the 6th draft of the decree on petroleum business with the biggest change being the petroleum price formula.

The new Decree has given more initiative to key enterprises in price announcement with two options proposed in the draft: giving enterprises full authority to announce both source creation costs, business costs and standard profits; or enterprises will announce source creation costs and standard profits, and the State will announce business costs.

"Both of these options are a big step forward in flexibly managing gasoline prices according to market mechanisms, in accordance with the Law on Prices," said Mr. Trinh.

The newly adjusted points related to licensing conditions for distributors and traders, allowing distributors to buy and sell with each other, are also expected by this enterprise to help businesses conduct business, announce prices with the petroleum market more flexibly, proactively and closely follow market mechanisms for enterprises.

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Source: https://tuoitre.vn/bien-dong-gia-xang-dau-lo-bat-cap-20250425224052699.htm