Small gas stations close due to losses: Long-term trend of transparent business

Due to the complicated developments in the world situation, the shortage of petroleum supply is spreading in many countries, including Vietnam. The decline in petrochemical refining capacity and the disruption of fuel flow (Western embargo on Russia) have weakened the global petroleum supply. Petroleum businesses are facing difficulties due to unstable supply. The situation in Nghe An is similar.

Discussing the issue of some small gas stations in Nghe An closing down due to losses and the impact on production, business and daily life of localities, and what solutions the relevant agencies have now, Mr. Pham Van Hoa - Director of Nghe An Department of Industry and Trade said: World gas prices are fluctuating complicatedly, distributors are also struggling, retail businesses and agents are facing more difficulties and are forced to accept market rules, competition rules and risks. The Department of Industry and Trade has worked with large corporations and companies in the area to find solutions and has adjusted the discount to increase by 1,000 VND/liter, but with many stores not having enough revenue to cover expenses, they are forced to close down. 10/681 stores closing down is also a normal part of the market mechanism and is common in many provinces and cities, and there will be more stores closing down in the near future. With current prices and supply, only large businesses can survive in the current situation.

In Thanh Thuy commune, Thanh Duc (Thanh Chuong), our observations found it very difficult to find a petrol station. After searching for a long time, the locals finally pointed out a station, but when we got there, the station had closed its curtains. The owner was said to be selling only bottles. He said that with the current situation, the more he sells, the more he loses, so it is difficult to survive.

The leader of the Department of Industry and Trade added: In Nghe An, there is a history that, due to its large area, there are many small retail gas stations. In the past few years, due to the Covid-19 pandemic, the business activities of these stores have been difficult. By 2022, strong fluctuations in gasoline prices have made this system even more difficult. In addition, the State has strengthened control over gasoline smuggling, so there is no or very little gasoline floating around, while many stores that previously relied mainly on this source of gasoline for their revenue are no longer there, so redistributing gasoline from official sources is even more loss-making. The inevitable trend is that small, weak businesses and small retail stores that do not participate in sustainable supply chains will have to be eliminated. Retail gasoline businesses that want to survive must invest systematically, link with official suppliers, do business properly, transparently, and "eat thin but sustainably".

People refuel in Vinh city. Photo: Quang An

“For petroleum businesses that want to sell more products, they need to invest resources and invest in a system of stores that meet the requirements. Currently, the Nghe An Department of Industry and Trade is continuing to direct key traders and petroleum distributors in the area to proactively balance domestic production and import sources, to ensure a continuous supply of petroleum, providing enough petroleum for franchisees to avoid a shortage of petroleum supply to the market,” said Mr. Pham Van Hoa.

Discussing the issue of ensuring supply for areas at risk of upcoming shortages, Mr. Nguyen Sy Van - Chairman and Director of Nghe An Petroleum Company said: Petrolimex is the leading enterprise in supplying petroleum nationwide. Nghe An Petroleum Company is a subsidiary of the Group, the leading enterprise in supplying and guiding the Nghe An market. Implementing the direction of the Provincial People's Committee and the Department of Industry and Trade in ensuring the supply of petroleum for people's lives and production in the area, the Company always meets the demand for petroleum in the entire system. Currently, the Company has 83 large petroleum stores in Nghe An, supplying more than 366,00 m3 per month.³ gasoline. The Company commits to not allowing any interruption in the supply of gasoline throughout the Company's system.

A gas station closed in Yen Thanh. Photo: VT

Currently, the Ministry of Industry and Trade directs local Departments of Industry and Trade to review the process of granting Certificates of eligibility to act as agents and certificates of stores eligible to retail gasoline and oil to amend, supplement and implement in accordance with regulations, ensuring convenience for organizations and individuals operating in the gasoline and oil business in the area. Review the implementation of granting Certificates of eligibility to act as retail gasoline and oil stores and certificates of eligibility to act as retail agents according to regulations. Guide gasoline and oil traders to implement regulations on gasoline and oil trading./.