Ministry of Industry and Trade will amend gas business conditions

In order to amend administrative procedures to facilitate enterprises, on September 27 in Hanoi, Deputy Minister of Industry and Trade Tran Quoc Khanh chaired a conference to collect opinions from enterprises on administrative procedures in the industry and trade sector. In particular, Decree 19/2016/ND-CP on gas trading (Decree 19) received many indignant opinions from enterprises.

Many business condition barriers

Since Decree 19 took effect (May 15, 2016), small and medium-sized enterprises trading in gas have sent their opinions to the Ministry of Industry and Trade requesting amendments because otherwise, small and medium-sized enterprises will have “no chance” of survival. Specifically, instead of providing regulations to ensure fire safety according to the original goal, this Decree has provided regulations that are considered business barriers for small and medium-sized enterprises.

Mr. Tran Trung Nhat, representative of Thai Duong Gas Production and Trading Company Limited (Tay Ninh province) said that each month, his company supplies more than 25,000 gas cylinders to the Tay Ninh market. However, according to the regulations of Decree 19, a distribution business must have up to 100,000 cylinders and a tank with a minimum capacity of 300 m3. This means that Mr. Nhat's company will have to invest nearly 75,000 more gas cylinders to meet the operating conditions. It is estimated that to implement this regulation, the company must have a capital of up to 100 billion VND. This is beyond the capacity of most small and medium enterprises.

Not only Thai Duong Gas Production and Trading Company Limited, but also representatives of more than 40 enterprises from many provinces and cities present at the conference also reflected on the inadequacies of Decree 19, which hinders their business activities with unnecessary regulations on the number of gas cylinders, warehouse volume, etc.

Ms. Nguyen Thi Thuy Trang, representative of gas trading enterprises in Khanh Hoa province, said that Article 11 of Decree 19 stipulates: General gas trading agents must meet the following conditions: Having a warehouse to store at least 2,000 LPG cylinders, having a gas distribution system including: LPG cylinder shops or supply stations, gas filling stations and having at least 10 agents. Ms. Trang said that general agents can completely only wholesale to agents, without necessarily having to have LPG cylinder shops. There is also no reasonable basis to stipulate: general agents must have at least 10 agents, why not 7 or 9 agents?

Will remove unreasonable regulations

At the conference, Deputy Minister Tran Quoc Khanh said that he would accept the opinions of businesses and agreed to amend the Decree in the direction of abolishing regulations on the number of tanks and warehouse scale. According to him, Decree 19 does not come from restricting businesses but wants to establish order in the gas trading market.

Deputy Minister Tran Quoc Khanh affirmed: The drafter did not intend to “kill small and medium enterprises” as some accused, nor did he intend to protect the interests of a few large enterprises. During the process of building Decree 19, small and medium enterprises had the opportunity to participate, but for one reason or another, they did not fully contribute their opinions.

Ms. Le Viet Nga, Deputy Director of the Domestic Market Department, added: Before the Decree took effect on May 15, 2016, the Ministry of Industry and Trade had publicly posted it on the Ministry's website as well as organized conferences to collect opinions in all three regions, but did not receive any comments from businesses. Therefore, the lesson learned from this story is to increase feedback and exchange between the law drafting agency and businesses to avoid a recurrence of the situation where regulations have to be revised as soon as they are issued.

Mr. Pham Ngoc Hung, Vice President of the Anti-Counterfeiting and Brand Protection Association, said: Because Decree 19 has been in effect since May 15, the Departments of Industry and Trade are currently making things difficult for businesses. Mr. Hung suggested that the Ministry of Industry and Trade should submit a document to the Government to temporarily suspend the effect of Decree 19 so that businesses can still operate under the old regulations.

According to News