Ask for gasoline price increase again

On May 29, a source from the Petroleum Market Management Team said that after the petroleum tax was lowered from 19% to 18%, key businesses continued to propose price increases because they said they were still making losses... Are businesses making losses or profits?

Information about the profits of petroleum enterprises has been "noisy" for the past few days. That is the announcement from the Vietnam Petroleum Association itself. Mr. Trinh Quang Khanh - Permanent Vice President of the Vietnam Petroleum Association told the press that the main importing enterprises are making a profit of about 270 VND/liter of gasoline, 290 VND/liter of DO oil, 195 VND/liter of kerosene and 130 VND/kg of FO oil after deducting all taxes and fees... If adding 300 VND in standard profit, the main importing enterprises of petroleum are making a profit of 430-590 VND/liter, kg of petroleum (depending on the product).

Also because of the profit, petroleum companies have raised the discount for agents to a common level of 650 - 700 VND/liter of gasoline, in some places up to 900 VND/liter for the past few days.

However, a leader of the Petroleum Market Management Team denied that petroleum companies are making a profit. Referring to the price of imported petroleum from Singapore in the past 10 days, he said that petroleum prices have not decreased but are increasing; the price of petroleum in Singapore has increased from about 106 USD/barrel in early May to about 112-113 USD/barrel in the past 2 days. Even crude oil prices have only fluctuated slightly around nearly 100 USD/barrel and have not decreased. "Petrol companies are currently losing 150-200 VND/liter of gasoline, and the loss is even heavier for oil" - the leader said.

According to economic expert Ngo Tri Long, there is still not enough basis to assess the profit and loss of petroleum business, suggesting that the petroleum industry must provide clear data and the National Assembly must pay attention to this issue because petroleum is directly related to people's lives. Petroleum enterprises also deny that they are making a profit, and all affirm that they are losing nearly 300 VND/liter of gasoline and oil sold if calculating the average price of 30 days. The leader of a major petroleum enterprise in the South said that the average price of 30 days, from April 26 to May 26, of RON92 is 110.6 USD/barrel; DO 0.05S is 116.5 USD/barrel. With the above prices, the enterprise is losing 247 VND/liter of gasoline and 297 VND/liter of diesel.

The question is why do petroleum companies increase their sales discounts to dealers despite losses? An official from the Petroleum Management Team explained that petroleum companies must increase discounts to "cut losses". According to him, because goods are selling slowly and prices are increasing, companies must increase discounts and compete with each other to "push" imported goods quickly, get capital to pay bank interest and return to importing new goods.

2% tax reduction does not increase prices?

The proposal to increase gasoline prices by businesses is now on the table of the leaders of the Ministry of Finance and the Ministry of Industry and Trade and is being considered for decision. A source from the business said that previously, businesses had proposed that if the tax was reduced by 2%, the retail price of gasoline would be avoided. However, the tax that businesses hoped to reduce would only be 1 percent, which, if converted into money, would only reduce nearly 200 VND/liter or kg of gasoline.

Economist Le Dang Doanh said frankly: Only the Ministry of Finance, Industry and Trade and enterprises know whether the petroleum enterprises are making a loss or a profit. Up to now, public opinion has never agreed with their claims of loss. "The loss and profit of the petroleum industry are often unclear, and we do not know what to base on to verify. Currently, the world petroleum price is continuously decreasing, so how can we make a loss? Especially with the recent reduction in petroleum import tax, it is clear that the cost of petroleum business has decreased significantly," Mr. Doanh emphasized.

According to Dan Viet - TH