Vietnam oil retailer's huge profits come under fire

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Analysts have slammed the Ministry of Finance's management of the gasoline market which has seen Petrolimex, the country's leading importer and trader of oil products, rake in extraordinary profits.

Tuoi Tre ((Youth) newspaper quoted fuel expert Nguyen Ngoc Son as saying it is unacceptable for a fuel trader to make quarterly profits of hundreds of billions of dongs (VND100 billion = US$4.7 million) since gasoline is among the items in the country's price stabilization program.

Petrolimex, which has more than half the market share, reported profits of VND1.42 trillion (US$67.45 million) in the first nine months, a year-on-year increase of nearly 60 percent.

It earned over VND637.5 billion in the third quarter alone when the prices of 92-RON, the most popular gasoline variety, hit an all-time high of VND24,570 ($1.17) per liter and remained there for more than four weeks.

Vietnam relies overwhelmingly on oil product imports, and the ministry allows companies to adjust retail prices based on average global prices for a period of 30 days.

But analysts questioned the rationale saying companies import fuel in advance when prices are at different levels.

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For instance, last quarter Petrolimex had gasoline inventories worth VND4.19 trillion.

Bui Ngoc Bao, Petrolimex chairman, said the profits were partly due to his firm's efforts to cut costs.

Petrolimex, which suffered a VND125-billion loss on gasoline sales last year, had hoped for greater profits in the first three quarters, he added.

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