Oil giants reap huge profits.

Profits exceeded expectations.

Vietnam National Petroleum Group ( Petrolimex ) has just submitted a document explaining its audited financial report for the first six months of 2024 to the State Securities Commission and the Ho Chi Minh City Stock Exchange.

According to Petrolimex, in the first six months of 2024, the parent company's after-tax profit reached nearly VND 1,530 billion, an increase of 135% compared to the same period last year. This was due to the fact that petroleum business operations in the first half of the year were basically stable and efficient, and sales volume increased compared to the same period in 2023.

Petrolimex stated that in the first half of the year, global energy supply and oil prices did not fluctuate as sharply as in previous years. In addition, the relatively stable supply of petroleum products from domestic refineries helped traders import according to plan, ensuring efficiency.

In addition, the company's financial operating profit increased compared to the same period last year, mainly due to higher dividends and profit sharing from subsidiaries, joint ventures, and associated companies compared to the same period.

Vietnam National Petroleum Group - Petrolimex achieved impressive profits in the first six months of 2024. Photo: Nguyen Anh

Also in the fuel sector, the business results of Vietnam Oil and Gas Group (PVN) in the first seven months were quite impressive, with the group's total revenue estimated at approximately VND 567,400 billion, exceeding the plan by 31%; PVN's consolidated profit reached VND 29,600 billion, exceeding the plan by 75%.

Previously, Vietnam Oil Corporation (PVOil) - which owns 2,200 gas stations (including 700 directly owned gas stations and 1,500 agency gas stations) - also reported consolidated pre-tax profit of VND 390 billion in the first two quarters of the year, exceeding the plan by 6%; consolidated revenue reached VND 64,000 billion, exceeding the six-month plan by 54%.

Some small businesses are leaving the market.

While some major fuel distribution companies are making huge profits, some smaller businesses, retailers, and distributors are choosing to exit the market.

The Ministry of Industry and Trade announced that as many as 16 petroleum businesses have requested to return their petroleum distribution licenses since the beginning of the year. The reason is that these businesses failed to maintain the necessary operating conditions and therefore voluntarily returned their licenses, continuing to operate as agents, retail outlets, or engaging in other business activities.

However, many petroleum businesses believe that the number of companies leaving the petroleum market is not limited to 16, but could be much higher.

The reason is that the draft amendments to the decrees on petroleum business, currently being developed and reviewed by the Ministry of Industry and Trade, include regulations that could restrict the business rights of distribution companies and further tighten their business operations.

Mr. Van Tan Phung, Chairman of the Board of Directors of Dong Nai Petroleum Trading Joint Stock Company, stated that in the past two years, especially after the disruption of gasoline and diesel supply in many areas, numerous gasoline and diesel retail businesses have had to close down.

Mr. Phung argued that currently, key businesses are being given too many "privileges," being allowed to import, trade among themselves, and sell to retail dealers.

"We see that petroleum businesses are not in a level playing field for fair competition in the market, especially in the relationship between wholesale businesses, distribution businesses, and retail businesses," he said.

The perceived "unequal" business practices between different stages in the petroleum distribution system were also acknowledged by Mr. Nguyen Xuan Thang, Director of Hai Au Phat Petroleum Company Limited.

That is why Mr. Thang suggested that the levels of wholesale traders, distributors, and agents/stores should be separated and independently declared and accounted for, in order to ensure that the costs and profits of each stage in the wholesale trader's system are accurately and fully reflected, thereby combating transfer pricing and tax evasion.

Source: https://laodong.vn/kinh-doanh/ong-lon-xang-dau-lai-khung-1388327.ldo