Revealing 'huge' loss, Dung Quat wants to calculate gasoline prices itself

Binh Son Refining and Petrochemical Company Limited (BSR - the management unit of Dung Quat Oil Refinery) has just sent a document to the Ministry of Finance proposing to calculate its own gasoline prices.

Although the State is allowing Dung Quat Oil Refinery to retain a portion of the money equivalent to 3-7% of gasoline import tax, it is still facing difficulties in consumption due to the sharp reduction in tax rates due to Vietnam's participation in free trade agreements, which requires the removal of tariff barriers.

Dung Quat Oil Refinery has a total investment of more than 5 billion USD in 2 phases.

In fact, the main petroleum enterprises have reduced the consumption of Dung Quat petroleum. Specifically, in 2015, Petrolimex imported up to 90% of its oil from ASEAN, and in December 2015 alone, imported entirely from ASEAN. Saigon Petro imported about 62%; PVOil imported 70-80%; Mipeco imported 83% from ASEAN…

In early 2016, the import tax on gasoline from Korea was reduced to 10%, while Dung Quat still applied 20%. Therefore, key petroleum enterprises such as Petrolimex, Saigon Petro, Thanh Me, Petimex… massively imported gasoline from Korea.

The recent application of import tax on retail prices based on weighted average has also created a large gap between Dung Quat and imported gasoline with certificates of origin from ASEAN, Korea, and China.

"Dung Quat's petroleum products are subject to double import tax differences compared to imports from the ASEAN region, South Korea, and China, and are also subject to higher taxes than the average tax used to calculate the base price," the document stated.

Specifically, when purchasing goods from Dung Quat, petroleum traders will have to pay an import tax of 18.08% on gasoline, 10% higher than that of countries that have signed FTAs. Moreover, the import tax on Dung Quat gasoline is 1.92% higher than the tax calculated on retail prices. Similarly, the difference between Dung Quat's input and output taxes on petroleum products is 6.4%.

While waiting for approval, BSR proposed that the Ministry of Finance allow Dung Quat to calculate and decide on selling prices, including self-calculating import tax at a reasonable level, without needing the State to support the tax of 3-7%, in return the State is not allowed to collect regulation fees for Dung Quat gasoline.

Previously, in a report sent to the Government in mid-2015, PetroVietnam revealed the "huge" loss of this plant since it began operating. In 2010, the company lost nearly 3,200 billion VND, in 2011 it lost nearly 4,800 billion VND.

In 2012 and 2013, the company lost over 6,400 and 6,000 billion VND respectively. In 2014, BSR lost 7,136 billion VND. Since its commercial operation, the company has lost about 27,600 billion VND (equivalent to about 1.2 billion USD).

According to VNE