Regulation on petrol trading proves efficiency

The state-owned Vietnam National Petroleum Corporation (Petrolimex)’s market share has fallen to only around 50% from a previous 60%, according to a recent report.

 

Decree 84 has helped regulate petrol trading

The Ministry of Industry and Trade released a report scrutinising the implementation of Decree 84 on petrol trading as well as recommending amendments to the regulation.

The decree has helped established a healthy business environment and fostered the regulation of petrol prices in accordance with market fluctuations, the ministry assessed.

In addition, the decree has helped develop some public and transparent economic tools to replace administrative methods, including the petrol price stabilisation fund, and new ways of formulating prices.

To date, the country has 14 petrol wholesalers including nine state-owned enterprises and four non-state firms, with 300 general agents, 4,500 agents and around 10,000 petrol outlets.

By the end of October 2012, Petrolimex held 50% of domestic market. It was followed by PetroVietnam Oil Corporation with 16.6%, up from 13% in 2008 and the Thanh Le Import-Export-Trading Company with 5.3%, up from 1.8% in 2008.

Some enterprises reported a decrease in their market share, including Saigon Petro with 6.5%, down from 7.8% in 2008, Military Petroleum Corporation with 2.4%, down from 5.7% in 2008.

With the application of Decree 84, the government no longer provides subsidies and compensation for petrol trading.

According to the ministry, domestic petrol prices have been basically managed based on the world market changes, significantly discouraging petrol smuggling.

Before the issuance of Decree 84 on September 15, 2008, the government had to subsidise petrol wholesalers. The subsidy reached around VND33.6 trillion (USD1.6 billion) between 2007 and 2008.

Now petrol wholesalers are held accountable for their business without subsidies from the government.

——————————————————————————————————————————————

implementation: do sth

foster: /fos tơ/: to encourage sth to develop

in accordance with: /ơ ko dns/: according to a rule or the way that sb say that sth should be done

decree: an official order from a ruler or a government that becomes the law

transparent:  allowing to see through it

wholesaler: sale whole sth

application: the practical use of sth

significantly: well

subsidize: to give money to sb or an organization to help pay for sth

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