Conclusion of the petroleum inspection: Price management is not close to the market, traders voluntarily stop doing business

ANTD.VN - The Government Inspectorate concluded that the management of gasoline prices through the current gasoline base price still has many shortcomings and inadequacies, leading to gasoline base prices not following the market closely, affecting the creation and distribution of gasoline sources.

Thiếu hụt xăng do dự trữ xăng dầu không đảm bảo

Gasoline shortage due to inadequate petroleum reserves

Voluntarily stop importing gasoline and oil due to inappropriate base price

Regarding the management and operation of gasoline prices, the Government Inspectorate said that according to the provisions of Price Law No. 11/2012/QH13, the application of pricing measures is limited.

However, the Government is currently applying the base price of gasoline to regulate the gasoline market according to Decree No. 83/2014/ND-CP, but the current calculation of the base price of gasoline still has many shortcomings and problems.

Specifically, the Ministry of Finance calculated the criteria for the base price of gasoline and oil inaccurately and not close to the market price, such as: deciding on the cost of bringing gasoline and oil from abroad to Vietnam to calculate the base price without legal basis, applying "standards" on costs from many years ago that are not suitable for the market;

The premium cost included in the base price is larger than the actual premium cost at some major petroleum traders; applying the fixed standard cost issued since 2014 is no longer suitable for current reality...

Meanwhile, the Ministry of Industry and Trade bases its calculation on the average of 15/10 days of world oil prices and the indicators announced by the Ministry of Finance to apply and calculate the base price of oil...

This fact leads to the base price of gasoline not being calculated correctly and fully according to world prices and other costs such as import tax, transportation costs, insurance costs, premiums and not keeping up with market fluctuations, so when world gasoline prices fluctuate strongly, many traders have stopped importing to avoid losses.

For example, Long Hung Trading and Service Company Limited and Military Petroleum Corporation registered a reduction in gasoline import quota in 2022, with a zero import quota for gasoline. This is one of the reasons leading to disruptions in gasoline supply.

On February 24, 2022, the Ministry of Industry and Trade issued Decision 242/QD-BCT, assigning the import volume of gasoline and oil in the second quarter of 2022 to 10/34 key gasoline and oil traders.

But the inspection results showed that most of the key traders importing gasoline did not meet the schedule, and the volume of gasoline imported was lower than the assigned limit.

Gasoline shortage is 589,035 m3/794,418 m3, oil shortage is 628,637 m3/1,248,966 m3. The main reason is that the base price of gasoline is low, so imported oil is sold at a loss.

To ensure the standard profit and capital recovery, the main importers lack the delivered volume of gasoline and oil, have to cut all retail costs, reduce the discount on the delivered volume of gasoline and oil, have to cut retail costs, reduce the discount for agents, leading to a situation of zero discount. Many retail stores and gasoline agents arbitrarily do not sell goods, contributing to the disruption of gasoline and oil supply.

Regarding the management of gasoline prices, the Ministry of Industry and Trade and the Ministry of Finance have failed to inspect and supervise key traders, leading to some key traders setting wholesale and retail prices for gasoline without basis; only sending price adjustment decisions, not sending price declaration documents/price registration documents to the Ministry of Industry and Trade.

The Inter-sectoral Team was established to help the Ministry of Industry and Trade - Ministry of Finance to manage prices, but this team did not work according to regulations and was ineffective, affecting the results of establishing basic gasoline prices and the operation of the gasoline market.

Lax management leads to shortage of millions of cubic meters of gasoline reserves

According to regulations, key petroleum traders are responsible for compulsorily reserving 30 days of supply of petroleum, calculated based on the average domestic consumption output per day of the previous year in Decree No. 83/2014/ND-CP and 20 days in Decree No. 95/2021/ND-CP.

From 2017 to September 30, 2022, 15/34 key petroleum traders, accounting for 90% of the domestic petroleum market share, had a minimum mandatory petroleum reserve shortage in terms of months in a year and days in a month, with a total reserve shortage of 1,028,918.8 tons/m3.

Particularly in September 2022, 9/15 key traders had a shortage of gasoline reserves of 5-9 months/9 months and 8/15 key traders had a shortage of oil reserves of 6-9 months/9 months;

6/15 wholesale traders have a shortage of gasoline reserves of 8-13 days/20 days and 4/15 wholesale traders have a shortage of oil reserves of 8-14 days/20 days.

Therefore, when the supply is scarce, there is not enough gasoline and oil reserves to sell to the market, affecting energy security and market stability. This is also one of the reasons for the disruption of gasoline and oil supply in recent times.

The Government Inspectorate stated that the Ministry of Industry and Trade has loosely managed, failed to inspect, rectify, and revoke the Petroleum Import and Export Business License under the authority prescribed in Clause 6, Article 8 of Decree No. 83.

As a result, it has not been possible to overcome the situation where key traders have been required to have a minimum reserve of gasoline and oil in circulation for many years (from 2017 to September 30, 2022), affecting gasoline and oil supply, energy security, etc.

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