The Ministry of Finance has set up three teams to audit pricing practices of the country's four leading petroleum distributors, Petrolimex, PetroVietnam Oil Corporation, Sai Gon Petro Co Ltd and Dong Thap Petroleum Trading Co Ltd (Petimex).
Teams will audit prices set by these distributors between January 1 and September 15, 2011, relative to their expenses and trading volumes, the ministry said.
The ministry is also taking a close look at disbursements from the Petrol Price Stabilisation Fund as of mid-September.
At a meeting held by the ministry on Sept. 20, Bui Ngoc Bao, general director of the leading petrol distributor Petrolimex – which accounts for 60 percent of total domestic market shares – said his corporation had suffered an enormous loss of 1.8 trillion VND (86.5 million USD) in the first nine months of the year.
Minister of Finance Vuong Dinh Hue questioned this, however. Even though petrol prices had been reduced by 500 VND per litre on August 26, petrol distributors were still enjoying a profit margin of 780 VND per litre, according to computations by the General Department of Customs – in addition to the fixed profit of 300 VND allowed by the Government.
Bao held a press conference on Sept. 21 to try to clarify the discrepancies.
The ministry's varying calculations were based on the "temporary price" which petrol importers have to declare to the General Department of Customs, which was not the final price paid, he said.
Contracts signed with foreign petrol suppliers were also based on futures markets, highly vulnerable to fluctuations in global oil prices, Bao added. Foreign exchange fluctuations also added a risk factor, since actual payments for fuel imports were conducted a month after the purchases. Meanwhile, imported petrol had to be sold at fixed prices set by the Ministry of Finance.
Prior to the August 26 petrol price reduction, he said, the cost of A95 petrol was 21,858 VND per litre while the retail price was 21,800 VND, resulting in losses of 58 VND per litre. However, Petrolimex was earning 219 VND per litre on the more popular A92 petrol and 289 VND per litre of diesel. After price reduction, Petrolimex began to lose 412 VND per litre on A95 petrol and 135 VND per litre on A92 while continuing to earn a small margin on diesel.
As petrol distributors suffered losses against the ministry's aim to stabilise the domestic market, there was no price competition among the 11 petrol distributors nationwide, puting consumers at a disadvantage, Bao added./.
Teams will audit prices set by these distributors between January 1 and September 15, 2011, relative to their expenses and trading volumes, the ministry said.
The ministry is also taking a close look at disbursements from the Petrol Price Stabilisation Fund as of mid-September.
At a meeting held by the ministry on Sept. 20, Bui Ngoc Bao, general director of the leading petrol distributor Petrolimex – which accounts for 60 percent of total domestic market shares – said his corporation had suffered an enormous loss of 1.8 trillion VND (86.5 million USD) in the first nine months of the year.
Minister of Finance Vuong Dinh Hue questioned this, however. Even though petrol prices had been reduced by 500 VND per litre on August 26, petrol distributors were still enjoying a profit margin of 780 VND per litre, according to computations by the General Department of Customs – in addition to the fixed profit of 300 VND allowed by the Government.
Bao held a press conference on Sept. 21 to try to clarify the discrepancies.
The ministry's varying calculations were based on the "temporary price" which petrol importers have to declare to the General Department of Customs, which was not the final price paid, he said.
Contracts signed with foreign petrol suppliers were also based on futures markets, highly vulnerable to fluctuations in global oil prices, Bao added. Foreign exchange fluctuations also added a risk factor, since actual payments for fuel imports were conducted a month after the purchases. Meanwhile, imported petrol had to be sold at fixed prices set by the Ministry of Finance.
Prior to the August 26 petrol price reduction, he said, the cost of A95 petrol was 21,858 VND per litre while the retail price was 21,800 VND, resulting in losses of 58 VND per litre. However, Petrolimex was earning 219 VND per litre on the more popular A92 petrol and 289 VND per litre of diesel. After price reduction, Petrolimex began to lose 412 VND per litre on A95 petrol and 135 VND per litre on A92 while continuing to earn a small margin on diesel.
As petrol distributors suffered losses against the ministry's aim to stabilise the domestic market, there was no price competition among the 11 petrol distributors nationwide, puting consumers at a disadvantage, Bao added./.
