Who benefits from the gasoline business?

(Baonghean) - The Vietnam National Petroleum Group (Petrolimex) has just announced its audited consolidated financial report for 2012, showing pre-tax profit of 978 billion VND, and other petroleum business revenue exceeding 599 billion VND. Of the total after- tax profit of 772 billion VND, profit from petroleum business reached 125 billion VND. With total assets of 55,000 billion VND, this profit is considerable. Public opinion is questioning: The petroleum industry frequently claims losses, so how can it achieve such large profits?

Could it be that in this particular industry, there's a case of real profits and fake losses? In 2012, domestic gasoline prices changed 12 times, with 6 increases totaling 6,050 VND/liter and 6 decreases equivalent to 3,700 VND/liter. Subtracting the decreases from the increases, the petroleum industry still managed to increase gasoline prices by 2,350 VND/liter in 2012 compared to 2011, while world oil prices continuously decreased. Each time world oil prices fell, the Ministry of Finance and the Ministry of Industry and Trade stipulated a specific reduction in gasoline prices; when world oil prices rose, the petroleum corporation immediately reported losses to justify price increases. The amount of the price increase was always greater than the amount of the price decrease. For example, in April 2013, gasoline prices were reduced three times, totaling over 1,200 VND/liter, but this was still less than the "shocking" price increase on March 28, 2013, which rose by 1,430 VND/liter, pushing gasoline prices to a record high of 24,550 VND/liter. With a nationwide monopoly in the petroleum business, no one can control the actual market price, making gasoline prices unpredictable. The petroleum industry frequently reports losses; it's understandable when prices are reduced, but it also claims losses when prices are allowed to increase. The relationship between gasoline production costs and business results in Petrolimex's annual financial reports shows a contradictory and inconsistent picture. Public opinion suggests that only a thorough audit by relevant authorities, including a detailed profit and loss statement, can be considered credible. According to Dr. Nguyen Thi Hien, an economist and former member of the Prime Minister's Research Committee, the unpredictable fluctuations in gasoline and diesel prices are due to the unprofessionalism of the government apparatus in managing fuel prices and the irresponsibility of those in charge of monitoring them. This irresponsibility has inadvertently aided privileged businesses in the trade of this particularly essential commodity.

With the current fuel business model, who benefits? The fuel industry, completely independent of market mechanisms, has the power to raise prices, generating hundreds of billions of dong in profits. Businesses in other sectors, however, struggle with each fuel price increase, with many suffering losses of hundreds of billions of dong. Rising fuel prices lead to price increases for many essential goods, further exacerbating people's hardships. The lack of transparency in the fuel business is a major public concern. Each time prices increase, a large quantity of fuel purchased at the old prices remains in inventory; this difference alone generates significant profits for the fuel industry.

Businesses and consumers alike only know how to check the meter readings when buying gasoline and diesel fuel, without being able to monitor the actual prices. This is not to mention the negative practices that have occurred at gas stations, as reported by the press, such as installing electronic chips or tampering with seals to shortchange customers. Gasoline and diesel fuel are essential commodities, ensuring production for businesses while also serving the needs of the people, and playing a crucial role in stabilizing prices in the market. Operating under a monopoly like the current one, if only the gasoline and diesel industry benefits, it neither ensures social justice nor significantly impacts production development and people's lives.

TRAN HONG CO