Businesses plan for worst case scenarios

Gasoline prices fluctuate, businesses lose 1,000 billion after one price management period

At the Annual General Meeting of Shareholders held by the Vietnam National Petroleum Group ( Petrolimex ) last weekend, Petrolimex leaders said that in 2024, the group faced many difficulties due to large fluctuations in the petroleum market, directly affecting the business activities of enterprises in the industry.

Petroleum businesses are heavily affected by market fluctuations. Photo: Nhu Y

Domestic gasoline prices are greatly affected by input factors, environmental fees and operating costs, making cost management more difficult than ever.

However, thanks to flexibility, optimizing production and distribution processes, minimizing costs and maximizing benefits from core business activities, the group has maintained stable growth, despite many market difficulties.

According to Petrolimex Deputy General Director Tran Ngoc Nam, although the output reached 5.7 million m3/ton, completing 33% of the plan and ensuring the set progress, in the first 4 months of 2025, the global oil market has never faced such great instability.

Since US President Donald Trump announced his plan to impose reciprocal tariffs on all imported goods on April 2, the world oil price has dropped very quickly, from 75 USD/barrel of Brent oil before to just over 60 USD/barrel after a few days. According to Petrolimex's calculations, the biggest drop at one point was over 20%.

According to Mr. Nam, with current State regulations, wholesale traders must reserve at least 20 days of inventory. In addition, the Ministry of Industry and Trade also allocates total resources to wholesale traders such as Petrolimex while the management of gasoline prices is carried out weekly.

Therefore, with deep and very rapid fluctuations in just a few days while the inventory according to Petrolimex's regulations is equivalent to about 750 thousand m3 of gasoline, the group's business activities have been seriously affected.

“In the April 10th operating period alone, Petrolimex lost 1 trillion VND in revenue, and with the inventory remaining until the April 17th adjustment period, Petrolimex lost another 300 billion VND. When the selling price drops sharply but the cost of goods purchased is still high, it will affect Petrolimex's business results in the core petroleum business in the first quarter of 2025,” said Mr. Nam.

Petrolimex leaders also said that with the current sharp drop in oil prices, combined with complex geopolitical fluctuations in the world, Petrolimex and many other oil traders realize that 2025 is a year with many risks and is very difficult to control for oil trading activities.

The Group will continue to closely monitor the situation and publish the first quarter financial report soon so that shareholders can better understand the level of impact and response solutions. At the same time, the Group has many important strategic solutions suitable to the practical situation.

Affirming that it will face many difficulties in the coming time, at the recent review conference of Vietnam Oil Corporation (PVOIL), Mr. Cao Hoai Duong, Chairman of the Board of Directors of PVOIL, said that in the first quarter, the general market situation was extremely difficult, oil prices fluctuated with a large amplitude, following a downward trend, so it greatly affected the unit's operations.

In the first quarter, PVOIL's petroleum business output reached nearly 1.3 million m3/ton, achieving 98% of the plan, with total revenue of the entire system reaching more than 35,000 billion VND, up 13% over the same period. Despite achieving double-digit revenue growth, the corporation's profit only reached nearly break-even.

According to PVOIL's leaders, in the context of limited room for development and the current extremely difficult business environment, the revenue target of continuing to grow by 8% in 2025 will be an extremely big challenge.

To achieve the growth plan, PVOIL's plan is built on the scenario of an average crude oil price of 65 USD/barrel and an exchange rate of 26,000 VND/USD; at the same time, it is calculated closely to market fluctuations and the actual implementation capacity of member units.

To achieve consolidated revenue of VND 137,000 billion by 2025, the corporation has allocated specific targets to each unit in the system and at the same time required the units to improve their market analysis and forecasting capacity, thereby proactively adjusting their operating plans accordingly.

Units must also further strengthen the review and reduction of unnecessary expenses, focusing resources on breakthrough projects that bring clear results.

In addition, promoting the development of non-petroleum services, promoting technology application and strengthening internal linkages will be key factors to help improve the competitiveness of the system in the coming time.

Weaving scenarios for the worst

Vietnam Textile and Garment Group (Vinatex) said that currently most of the fiber industry units have orders until May 2025.

However, since the last week of February 2025, the yarn market has decreased in both price and demand while cotton prices have continuously dropped sharply. In the garment industry, many businesses have received enough orders until the end of the second quarter and are currently trading for the third quarter of 2025.

Textile and garment enterprises are cautious about the risk of reciprocal tariffs from the United States. Photo: Nhu Y

“In the first quarter, orders tend to speed up delivery to limit the impact, if any, of US tariff policies, while orders in the second quarter of 2025 tend to slow down due to waiting for the tax policies of the Trump administration.

The Group has completed building scenarios for US tariffs as a basis for implementing an action program in the coming time to ensure the set growth target," said a Vinatex representative.

According to Mr. Le Tien Truong, Chairman of Vinatex, as soon as the information about the temporary tax suspension was announced by President Donald Trump on April 10, customers accelerated production and delivery progress, requesting to complete orders within 90 days. The Group launched a "90-day lightning-fast" campaign determined to complete orders in the second quarter and complete them before July 5, 2025.

In addition, according to Mr. Truong, businesses in Vinatex's ecosystem have proactively developed short- and long-term response solutions, focusing on negotiating with customers in the spirit of friendly sharing, seeking export markets as well as new sources of raw materials, optimizing production management, and speeding up production of signed orders in the second quarter.

Regarding coping with difficulties, Mr. Vu Duc Giang, Chairman of the Board of Directors of Viet Tien Garment Joint Stock Corporation, said that in 2025, the Vietnamese textile and garment industry in general and the corporation in particular will continue to face many difficulties and challenges. These include increasing pressure from customers on strict evaluation standards, requirements to promote automation, digitalization and application of circular economy in production.

In addition, the world economic and political situation is forecast to continue to be unpredictable, along with pressure from small orders, fast delivery requirements and fierce competition for domestic labor. Especially the imposition of tariffs from the United States.

Faced with that situation, Viet Tien has proposed timely solutions, promoted restructuring, rearranged the organizational model, aimed at producing ODM orders (private label orders, based on existing product designs) and OBM, gradually exporting products under Viet Tien's brand to markets in the region and the world.

Opportunity to restructure the business

At the conference “Supporting businesses to overcome difficulties in the context of the US applying reciprocal taxes on goods exported from Vietnam” recently organized by the Ministry of Industry and Trade, Minister Nguyen Hong Dien said that the difficulties caused by the US applying reciprocal taxes are also an opportunity to proactively restructure the economy and restructure businesses to create more positive changes in the long term. To achieve this goal, there needs to be close coordination between relevant parties from businesses, industry associations to state management agencies at all levels.

Mr. Dien suggested 9 groups of tasks and solutions for industry associations, 8 groups of tasks for manufacturing and exporting enterprises and requested relevant ministries and branches to pay attention to implementing 5 groups of key solutions to promptly support enterprises in removing difficulties, responding flexibly and effectively to changes in import policies from major countries, especially the United States, and maintaining sustainable growth.

Source TPO

Source: https://baotayninh.vn/doanh-nghiep-len-phuong-an-cho-tinh-huong-xau-a189407.html