Obstacles hinder automated petrol stations

 

Hanoi (VNA) - All 2,400 gas stations owned by the Vietnam National Petroleum Group (Petrolimex) are designed to accommodate cash free purchases and can switch to an automated pay model to help reduce labour costs, especially late at night, said Bui Ngoc Bao, Petrolimex’s Chairman.

Although automated payment functions are readily available, Petrolimex’s three year test run has yet to be implemented on a larger scale.

In Hanoi, the company has seven petrol stations with automated pumps for customers paying via credit cards, but they must all be accompanied by normal pumps with workers to supply the demand of the majority who pay by cash.

Bao stated the main reason behind the automated model failure is price difference; banks charge an additional fee for card-based purchases that is not borne by the customers but the company itself and is not included in the circulation and management fee that Petrolimex pays the Government.

Said transaction fee ranges from 0.5 to 1 percent of total amount paid for domestic cards and 2.5 percent for international cards.

The circulation and management fee imposed by the Government is about 5 percent of total price, including importing costs, storage costs, distribution costs or losses, of which labour costs account for 30 percent in total.

Furthermore, as petrol prices are regulated by the Government, petrol companies cannot change the price to respond to the market’s elasticity.

In reality, the price recorded at Petrolimex’s automatic stations is only 100 VND (0.009 USD) per litre cheaper than those with human workers.

This makes customers hesitant to pump petrol themselves, seeing how they will only save a miniscule amount of money even when the drop in price is solely created by Petrolimex to encourage them and is not included in the Government’s regulated price list.

In addition, since motorbikes, the most common vehicles in Vietnam, do not have a safety switch to stop petrol from being pumped into the tank like cars, spilling is bound to occur and cause danger to the drivers. This is amplified by the lack of etiquette and regard for public safety in people who use mobile phones and smoke within the vicinity of a petrol station, regardless of prohibiting signs.

To counter this, the company has proposed to the Ministry of Finance and the Ministry of Industry and Trade to adjust the operation costs for petrol from 5 percent to 10 percent, a common rate in advanced countries, to push for cash-free purchases and the automated pumping model.

If said transaction fee can be included in regulated petrol price, in the next three years, Petrolimex expects to convert 70 percent of all petrol stations to automatic model, keeping only 30 percent with workers, said Bao.

The company aims to make automatic technology more popular to help save time and cut cost for customers and to improve service.-VNA