Minister of Industry and Trade explains about gasoline shortage

During the questioning session of the Government Inspector General Doan Hong Phong on the morning of November 5, delegate Le Hoang Anh (Gia Lai) stated that currently many gas stations in Hanoi and Ho Chi Minh City do not sell or sell very little, with a limit of only 500,000-600,000 VND for a car, causing public outrage. The delegate asked the Minister of Industry and Trade to clarify this issue.

Explaining this opinion, Minister of Industry and Trade Nguyen Hong Dien said that he had reported to the National Assembly during the socio-economic discussion session on October 28.

Delegate Le Hoang Anh. Photo: Vietnamnet

"The causes and solutions are still valid as we have reported. However, in the past few days, we have seen new developments in the oil and gas situation worldwide and domestically," said the Minister.

He said that the world's gasoline and oil supply is increasingly scarce, because in recent days Europe and major economies have increased purchases of existing oil from major suppliers, OPEC+ and Russia.

The exchange rates for foreign currencies to import gasoline and oil such as USD and Euro have been constantly changing in an upward direction, up 0.75% last week, and are expected to continue to increase in the next few weeks, up to about 4.25% for USD and around 5% for Euro. The Minister of Industry and Trade said that these are difficulties for import enterprises.

In addition, another difficulty is accessing foreign currency capital to get import guarantees and payment support from key enterprises and distributors. Because many enterprises do not meet the lending and guarantee conditions of banks.

As a result, there has been a "local supply disruption" in some places, especially in large, densely populated cities.

Faced with that situation, the Government has directed relevant ministries and branches to take action, and up to now, each relevant branch has been and is performing its duties and responsibilities better.

Minister of Industry and Trade Nguyen Hong Dien. Photo: Vietnamnet

The Minister informed that yesterday afternoon, the Ministry of Finance had a plan to adjust the cost of bringing gasoline from abroad to Vietnam and the Ministry of Industry and Trade agreed. If there are no major changes, the arising costs will be updated in the operating period on November 11. This is also a relatively good solution.

In addition, the State Bank has specifically directed commercial banks to consider and resolve issues with businesses that are having difficulty accessing capital and providing guarantees for payment.

The Ministry of Industry and Trade has directed market management forces to coordinate with localities to strengthen inspection, supervision, and handling according to regulations and will study additional penalties to apply at the appropriate time.

"We have also sent a document requesting local authorities to strengthen state management within their authority and coordinate with the Ministry of Industry and Trade as well as other ministries and branches to resolve the issue once and for all. We hope that with the efforts we have just reported, the petrol situation will be basically resolved in the coming days," the Minister said.

Mr. Dien also analyzed that the world oil market has a great impact on Vietnam. Domestically produced oil meets about 80% of demand, however, "of that 80%, half, or even more than half of the crude oil we still have to import from the world, so the world market will affect the domestic market."

Furthermore, our country imports about 20% of finished petroleum products from foreign countries, so it will also be affected by world fluctuations.

Domestic production output and foreign imports have reached 86% of the year's plan. "The whole year requires about 18,000-19,000 cubic meters, we have achieved 86%, so the supply is completely guaranteed according to plan," the Minister affirmed.

Illustration photo. Photo: Internet

Research on adjusting gasoline prices every 5 days or daily

Debate later, Delegate Nguyen Anh Tri (Hanoi) assessed that domestic gasoline and oil "are clearly in chaos and in dire need of stabilization". According to Decree 95, the current regulated gasoline and oil price is to take the average world price 10 days ago to calculate the domestic price for the next 10 days, thus, the average domestic price will differ by up or down compared to the world price for up to 20 days. Delegate Tri said that this calculation method is outdated and inappropriate, it may have been appropriate in 2021 but is no longer appropriate now.

The Hanoi delegate also said that recently, the Ministry of Industry and Trade has granted licenses to 36 petrol and oil import and export hubs and more than 330 petrol and oil distributors. While civilized Japan only has 5 hubs, China has 4-6 hubs, which has led to consequences that are very difficult to manage.

Regarding the adjustment of gasoline and oil prices, the Minister said that it is implementing the provisions of current laws. Decree 95 stipulates that gasoline and oil prices are adjusted once every 10 days; the basis for adjustment is the average price of the previous 10 days of the world market in normal times.

On October 28, Minister Nguyen Hong Dien said, "Because the gasoline and oil market is very different in this chaotic world context, it has clearly exposed shortcomings in current regulations. The Government has also recognized this and the Prime Minister has directed the Ministry of Industry and Trade to preside over and coordinate with ministries and branches to study and amend Decree 95 to suit reality."

The world changes every day, every hour, so "no matter how hard we try, legal regulations will always lag behind reality." The Minister expressed hope that in the future, with the assignment from the Government and competent authorities, the Ministry of Industry and Trade will coordinate with ministries and branches to amend this regulation to be closer to the situation.

There are opinions that the Ministry of Industry and Trade grants licenses indiscriminately. The Minister said that licensing is according to the provisions of Decrees 83 and 95.

Mr. Dien also found that the current gasoline and oil business system is "multi-layered, so it will be very confusing in situations like this, especially with many layers, costs will increase and definitely have to be added to the retail price".

The Minister said that the system must be rearranged from the main enterprise and perhaps there is no need for too many distributors, but only from the main enterprise to the agent and to the retail store, thus reducing the number of levels.