Proposing to increase competition in the petroleum trading market

VCN - On the Decree amending and supplementing Decree 95/2021/ND-CP and Decree 83/2014/ND-CP of the Government on petroleum trading, the Vietnam Chamber of Commerce and Industry (VCCI) said that only competitive pressure could prevent suppliers from raising prices unreasonably.
Towards a healthy financial market to restore the market’s confidence Towards a healthy financial market to restore the market’s confidence
The Ministry of Finance is not responsible for chairing, studying and proposing the establishment of a debt trading market The Ministry of Finance is not responsible for chairing, studying and proposing the establishment of a debt trading market
Proposing to increase competition in the petroleum trading market
Illustration: H.Diu

Allows retailers to get gasoline from different sources

In the draft Decree, the Ministry of Industry and Trade gave two options, not allowing (option one) and allowing (option two) petrol and oil retail stores to get goods from different sources.

Although option two was unanimously selected, in the report, the Ministry of Industry and Trade was concerned that this regulation would be contrary to the Commercial Law, difficult to control the quality of petrol and there was no unit responsible for supplying gasoline to retail stores when supplies are scarce.

However, VCCI said that these concerns were not really necessary because Decrees 95 and 83 stipulated that retail stores could only sell in the form of agent delivery. The retail sale of items can be carried out in many different forms according to the agreement of the parties, including the form of agency, franchising, and outright purchase and sale. The fact that Decree 95 and 83 does not allow retail stores to do business in the form of outright purchase and sale is contrary to the freedom of business in the Enterprise Law and the Commercial Law.

Moreover, the quality of petroleum can be well controlled without limiting the 1:1 distribution relationship. When delivering gasoline from tank trucks to retail stores, the parties always take and store goods samples. If there is a problem with the quality of gasoline sold to consumers, it is possible to re-check the samples and trace the source to determine the responsibility of the parties.

Additionally, VCCI said that many petroleum distributors were importing goods from many agencies, so it doesn't make much sense to ask retailers to only import from one source.

From the above reasons, VCCI believed that the revised Decree should allow retail stores to choose a business form, can act as an agent or receive a franchise for a distributor, or can choose the outright purchase and sale form. In the case of a retail store acting as an agent or a franchisee, only one distributor is allowed to import goods. Distributors are responsible for the quality and prices of goods in accordance with the law. If the retail store chooses the outright purchase and sale form, it is allowed to import goods from different wholesalers. At this time, the retail store will be responsible for the quality and price of the goods in accordance with the law.

Redesigning the petroleum market

Additionally, in the draft Decree, the Ministry of Industry and Trade intends to add the regulation that distribution traders can only import goods from three key traders and cannot take goods from other distributors. This regulation is intended to attach the responsibility of the focal trader to supply goods to the distribution traders when the supply of petroleum is difficult.

VCCI thought that this concern was not necessary. If the petroleum supply is complex, the fact that wholesalers prioritize selling in their system or selling to other distributors will not change the overall supply in the market. To deal with the problem of hoarders, it is necessary to increase the flexibility of the market to facilitate traders to move goods from places of excess to places of shortage rather than restrict or hinder the distribution chain.

More importantly, according to VCCI, the policy must deal with the price issue so the parties have business motivation. If the world supply is short or the price is set too low, there is not much difference in who the leading trader sells to.

In addition, the Ministry of Industry and Trade proposed a plan that the State would provide financial support to key petroleum traders, when these businesses make losses to ensure the supply of petroleum for the economy.

According to VCCI, this support is the State's use of budget money to reduce business costs of enterprises while the State still maintains low gasoline prices and collects taxes on petrol.

VCCI considers this unnecessary when there is a much better solution. The State increases the retail price of petrol and oil so that it accurately reflects the costs of the enterprise or gives the enterprise the freedom to decide the price. At that time, businesses will have the motivation to do business without any support.

Along with the above comments, according to VCCI, many management regulations in the petroleum sector are reducing the market's competitiveness. For example, business investment and market entry conditions are too high, making existing businesses in the market worried about the risk of new businesses entering, leading to existing businesses not having much motivation to improve and upgrade services to attract users. Therefore, these issues need to be solved to increase the competitiveness of the market, only competitive pressure will prevent suppliers from raising prices unreasonably.

Simultaneously, VCCI proposed a redesign to the petroleum market in the direction of reducing intermediate levels. The management plan can be considered according to the stages of petroleum business, including: production, import, wholesale, retail, and support services.

By Huong Diu/ Ha Thanh

Link: https://haiquanonline.com.vn/de-nghi-tang-tinh-canh-tranh-cho-thi-truong-kinh-doanh-xang-dau-171349.html

By Huong Diu/ Ha Thanh

Related News

Exports face many difficulties

Exports face many difficulties

VCN - In the first months of 2023, the absence of export orders plus the downward trend in commodity prices have slowed down trade activities.
Ensure policies to attract investment when implementing global minimum tax

Ensure policies to attract investment when implementing global minimum tax

VCN - On the afternoon of March 30, in Hanoi, the Ministry of Finance held a regular press conference in the first quarter of 2023, chaired by Deputy Minister of Finance Nguyen Duc Chi. Many issues related to the tax field were discussed and answered at the conference.
Increase competitiveness when export turnover comes from domestic enterprises

Increase competitiveness when export turnover comes from domestic enterprises

VCN - According to the Vietnam Chamber of Trade and Industry (VCCI), export-oriented industrialized countries, especially when export turnover comes from domestic private enterprises, are likely to more competitive and sustainable.

Latest News

Saigontex 2023 attracts over 1,300 domestic, foreign businesses

Saigontex 2023 attracts over 1,300 domestic, foreign businesses

More than 1,300 businesses from 21 countries and territories are participating in the Vietnam Textile & Garment Industry Expo (Saigontex) 2023, the leading exhibition of the industry in Southeast Asia, which opened in Ho Chi Minh City on April 5.
Mong Cai international border gate sees strong recovery

Mong Cai international border gate sees strong recovery

The Mong Cai international border gate in the northern province of Quang Ninh has become vibrant as before the pandemic, showing a positive sign in the economic recovery of Mong Cai city in particular and Quang Ninh province in general.
Vietnam a potential market for French businesses, investors: experts

Vietnam a potential market for French businesses, investors: experts

French businesses should innovate their approach, enhance their understanding of culture and language, and make changes to adapt to Vietnam's transitioning economy in order to expand their market share and boost investment in the Southeast Asian nation, said Dr. Jean-Philippe Eglinger, the founder of the Viet Phap Strategies.
Import and export turnover across Cao Bang prospers but still exists difficulties

Import and export turnover across Cao Bang prospers but still exists difficulties

VCN – After China resumes trade, Cao Bang province's import and export activities see remarkable prosperity.

More News

Cashew industry strives to "get on the shelves of world supermarkets"

Cashew industry strives to "get on the shelves of world supermarkets"

VCN - Although holding the number one position in the world in exporting cashew kernels for many years, the position of Vietnam's cashew industry in the world cashew value chain is very small because it mainly exports kernels with preliminary treatment.
HCM City’s industrial production index down 0.9% in Q1

HCM City’s industrial production index down 0.9% in Q1

Ho Chi Minh City’s Index of Industrial Production (IIP) in the first quarter of 2023 declined by 0.9% compared to the same period last year, the municipal Department of Industry and Trade reported at a press conference on April 3.
Fisheries exports estimated at 1.85 billion USD in Q1

Fisheries exports estimated at 1.85 billion USD in Q1

Fisheries export value was estimated at 1.85 billion USD in the first quarter (Q1) of this year, a fall of 27% compared to the same period last year due to lower consumption and import demand under the impacts of inflation and economic recession, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Quang Ninh aims to attract quality FDI inflows

Quang Ninh aims to attract quality FDI inflows

The northern coastal province of Quang Ninh has strengthened measures to attract quality foreign direct investment (FDI) inflows, especially from big names in the processing-manufacturing industry.
Manufacturing enterprises increase their competitiveness thanks to digital transformation

Manufacturing enterprises increase their competitiveness thanks to digital transformation

VCN - Overcoming difficulties in 2023 requires manufacturing enterprises to self-improve and innovate. Digital technology is one of the effective solutions to help manufacturing businesses grow and compete.
32nd Việt Nam Expo promises to boost business linkages

32nd Việt Nam Expo promises to boost business linkages

The 32nd Việt Nam International Exhibition (Vietnam Expo) will take place in Hà Nội from April 5-8 with the participation of more than 500 domestic and foreign enterprieses, the event’s organisers have announced.
Prevention of price risks before news that Indonesia increases rice imports in reserve

Prevention of price risks before news that Indonesia increases rice imports in reserve

VCN - In response to demand signals from key markets such as Indonesia and the Philippines, the Import-Export Department (Ministry of Industry and Trade) suggested that rice exporters actively monitor the market situation and fully assess the opportunities as well as risks to build a trading plan.
Japanese investors highly appreciate Vietnamese property market

Japanese investors highly appreciate Vietnamese property market

Representatives from around 180 Japanese businesses and investors on April 1 attended a Tokyo workshop on Vietnamese real estate, during which many of them highly appreciated the potential of Vietnam’s property market.
Seafood enterprises propose to remove obstacles from exporting to the EU

Seafood enterprises propose to remove obstacles from exporting to the EU

VCN - Seafood enterprises are facing inadequacies in applying for material certification (S/C) and food safety certificates (H/C), which affects the production and export of seafood to the EU.
Read More

Your care

The system has not recorded your reading habits.

Please Login/Register so that the system can provide articles according to your reading needs.

Latest Most read
Saigontex 2023 attracts over 1,300 domestic, foreign businesses

Saigontex 2023 attracts over 1,300 domestic, foreign businesses

More than 1,300 businesses from 21 countries and territories are participating in the Vietnam Textile & Garment Industry Expo (Saigontex) 2023, the leading exhibition of the industry in Southeast Asia, which opened in Ho Chi Minh City on April 5.
Mong Cai international border gate sees strong recovery

Mong Cai international border gate sees strong recovery

The Mong Cai international border gate in the northern province of Quang Ninh has become vibrant as before the pandemic, showing a positive sign in the economic recovery of Mong Cai city in particular and Quang Ninh province in general.
Vietnam a potential market for French businesses, investors: experts

Vietnam a potential market for French businesses, investors: experts

French businesses should innovate their approach, enhance their understanding of culture and language, and make changes to adapt to Vietnam's transitioning economy in order to expand their market share and boost investment in the Southeast Asian nation, said Dr. Jean-Philippe Eglinger, the founder of the Viet Phap Strategies.
Import and export turnover across Cao Bang prospers but still exists difficulties

Import and export turnover across Cao Bang prospers but still exists difficulties

VCN – After China resumes trade, Cao Bang province's import and export activities see remarkable prosperity.
Cashew industry strives to "get on the shelves of world supermarkets"

Cashew industry strives to "get on the shelves of world supermarkets"

VCN - Looking back to 2022, while the export turnover of the cashew industry reached US $ 3.08 billion, the import turnover of raw cashews consumed US $ 2.678 billion.
Mobile Version