During a rare burning argument over recent fuel price adjustments at a conference on Tuesday, Finance Minister Vuong Dinh Hue asked local fuel companies to quit trading in fuel if they can't survive with the current prices.
"The Ministry of Finance doesn't leave any business out. If our management causes damages to businesses, we will take responsibility and pay compensation. If businesses can't do it, they need to quit," Hue told the companies after they questioned the ministry's latest order to decrease fuel prices on August 26. Later they also proposed new price increases, but the ministry refused.
However, will any of the companies quit, considering that 90 percent of market share is currently held by three state-owned companies? Petrolimex is the largest trader, with a market share of more than 60 percent.
No one will quit, even though all of them have claimed huge losses, because the losses have never been certified by state auditors.
At the conference, Bui Ngoc Bao, general director of Petrolimex, said that as of August, his corporation had lost VND1.8 trillion (US$86.4 million) and he predicted that the losses would increase by VND200 billion ($9.6 million) this month, due to the ministry's fuel price decrease.
But Hue denied Bao's claim, saying that Petrolimex didn't suffer losses, but earned at least VND1,000 ($0.04) for each liter of petrol sold before the latest adjustment.
The stories about Petrolimex's "fake losses, real benefits" aren't new and the same is true for other petroleum traders in Vietnam. Everyone knows about them, but no one has ever officially talked about them.
After all, businesses can't survive if they run at huge losses. However, local fuel traders, despite reports about huge losses, are still operating, showing no sign of being on the verge of bankruptcy. Nor do they show any signs of losing their market shares.
While the government is trying to decrease good prices, and people are struggling against inflation everyday, fuel traders keep complaining about "losses," asking for price increases, and even threatening to cut off fuel stockpiles if they aren't allowed to increase prices to make up for their "losses."
What matters now is not who will quit.
What matters is that it's time that government agencies review the fuel industry. Those businesses that are incapable and dishonest need to be removed, so better companies can do better business.
We have said that we will let fuel prices be decided by market forces for years, but we haven't created a real competitive market where only competent businesses can survive. As long as three state-owned companies still hold up to 90 percent of the market share, the problems will remain and the people will continue to be the ones who suffer the most from unreasonable fuel prices.