A customer has his motorbike's fuel tank filled at a station in Ho Chi MInh City / PHOTO: DIEP DUC MINH
A representative of the Ministry of Industry and Trade said on Tuesday that the profits recently announced by Vietnam's biggest fuel retailer, Petrolimex, were not as significant as the public thought.
Vo Van Quyen, head of the ministry's domestic market department, said amid public assumed that the state-owned company, officially known as the Vietnam National Petroleum Corporation, had earned huge profits thanks to the four hikes in fuel prices since the beginning of this year.
In its report to the State Securities Commission of Vietnam on August 16, Petrolimex said its pretax earnings were VND898 billion (US$42.5 million) for the first half of the year, of which gasoline sales were responsible for around VND388 billion ($18.4 million), or 43 percent.
Quyen said Petrolimex imported 4.4 million tons of fuel in the first half, and was supposed to earn VND1.2 trillion ($56.8 million) in profits due to a government decree that sets the norm for profit on a liter of fuel at VND300.
But, the company had to set aside money for the fuel stabilization fund, so its profits were lower, according to the official.
"Many people say with VND14.5 trillion (US$686.35 million), Petrolimex could have earned more profits by [just] depositing it," he said.
On July 17, Vietnam's fuel prices saw a 1.9 percent increase, putting 92-RON, the most commonly used grade of gasoline in the country, at VND24,570 ($1.16) per liter. It was the fourth hike since the beginning of this year.
Later, on August 22, the ministry and the Ministry of Finance ordered local businesses to decrease fuel prices by VND300 per liter.
Quyen announced at the press conference that the ministry has finished drafting adjustments to a decree on managing the fuel business, and the draft is now being reviewed by the Ministry of Justice.
The proposal will be submitted to the government for approval this month at the latest, he said.
According to Quyen, under the revised decree, local fuel prices will continue to be based on the market but would be supervised by the government.
Only when a competitive environment is created with the participation of many businesses, will the government gradually withdraw its control over fuel prices, he said.
As of last October, Vietnam had 13 firms in the fuel business, including nine state-owned companies, according to a report by the ministry earlier this year.
Petrolimex accounted for some 50 percent of market shares, while PV Oil an arm of the state-owned Vietnam Oil & Gas Group, or PetroVietnam, had 16.6 percent, it said.
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