Eliminate intermediaries in the distribution of petroleum products.

Allowing fuel distributors to purchase fuel from each other creates multiple layers of intermediaries in the distribution process, increasing costs and contributing to low retail discounts.

Allowing fuel distributors to purchase fuel from each other creates multiple layers of intermediaries in the distribution process, increasing costs and contributing to low retail discounts.

Mr. Phan Van Chinh, Director of the Domestic Market Department, further clarified the content of the draft Decree on petroleum business.

The provision prohibiting fuel distributors from buying and selling fuel to each other is a controversial point in the draft Decree on fuel business.

Responding to this issue at the Ministry of Industry and Trade 's regular press conference for the third quarter of 2024, Mr. Phan Van Chinh, Director of the Domestic Market Department, stated: "The draft Decree replacing the Decrees on petroleum business stipulates that petroleum distributors are not allowed to buy and sell petroleum among themselves to ensure effective management and reduce intermediaries and costs."

“This regulation was issued after inspections, audits, and investigations by relevant agencies, and then submitted to the Ministry of Industry and Trade and the Government . Based on the opinions of ministries and agencies, the Ministry of Industry and Trade drafted the Decree with this content, ensuring that petroleum management gradually moves towards a market-based system but eliminates intermediaries to reduce costs ,” Mr. Chinh explained.

The petroleum supply chain currently has three levels: sourcing (primary distributors); distribution companies; and retail companies. In Government Decree No. 80/2023/ND-CP, amending and supplementing several articles of Government Decree No. 95/2021/ND-CP dated November 1, 2021, and Government Decree No. 83/2014/ND-CP dated September 3, 2014, on petroleum business, the Government has approved the elimination of intermediaries such as general agents.

"We should implement management along the supply chain, not horizontally," Mr. Chinh emphasized. Furthermore, the conditions for becoming a distributor and a retailer are completely different. Businesses must meet the specific requirements of each segment, without discrimination.

According to the Domestic Market Department, the regulation prohibiting gasoline and diesel distributors from buying and selling each other's gasoline and diesel does not eliminate competition in the market, while also helping to eliminate "fictitious" figures on fuel consumption and reduce intermediaries.

One new aspect of the draft Decree is the diversification of retail segments. "Even the placement of signs and logos is subject to agreement between the two businesses in accordance with the law; the state does not interfere," Mr. Chinh informed.

During the drafting process of this Decree, the Ministry of Industry and Trade organized numerous conferences and seminars to gather feedback. The Ministry of Industry and Trade will develop two options regarding distribution traders and seek opinions from members of the Government. With the current 30 distributors, a competitive market can be created in the petroleum business sector.

Furthermore, regarding petroleum distributors, the draft Decree has reviewed and removed many conditions, such as: eliminating the requirement for distributors to stockpile petroleum for 5 days, and removing some regulations on storage facilities…

Conversely, petroleum wholesalers are increasing the conditions to hold them accountable and create a supply chain for distribution. Along with this, the application of digitalization in controlling the entire petroleum supply chain is becoming easier and more efficient.

Source: https://baodautu.vn/cat-bo-bot-khau-trung-gian-trong-phan-phoi-xang-dau-d228233.html