Petrol trade needs scrutiny
The deputy director of the Ministry of Industry and Trade's market watch department, Do Thanh Lam, spoke with the Hai Quan (Customs) newspaper about recent price scandals.
What are the results of the two recent inspection campaigns on petrol trading?
According to our reports, after the petrol price hike in August 13, 82 petrol stations in 16 central government cities and provinces closed or reduced their opening hours. After another price hike in August 28, this figure rose to 138 stations in 25 localities. This had been common before petrol price hikes, because traders want to keep their petrol for higher prices. Understandably, this has made customers annoyed.
As a result, we immediately conducted inspections at petrol stations in 33 provinces, which were reported to have stopped trading or reduced trading hours, supposedly to wait for higher prices. Southern Binh Duong and Dong Nai provinces, Ha Noi and HCM City were found with highest numbers of suspected offenders with 33, 23, 22 and 17 petrol stations closed respectively. Most of the petrol stations were then found to have appropriate reasons for their closure. Just two stations are under further investigations for violations.
So what are detailed violations in the petrol business?
After receiving information about enterprises who deliberately retained their petrol to wait for higher prices, we established an intersectoral team to inspect petrol enterprises.
The team inspected seven wholesalers who own stations that claimed to have run out of petrol during the two price hikes. Five of them were found to have committed violations. All the offending enterprises were fined by local market watch departments, with fines totalling VND245 million (US$11,600).
For instance, the Tu Luc 1 Petrol Company committed the violation of petrol trading with partners outside its distribution system without authority.
The Ngoc Khanh Company reduced its quantities of available petrol without an appropriate reason.
The Ha Tay Petrolimex Transport and Service Company was found to be not registered for a distribution system with the authority.
So what measures can limit such violations in a potential petrol price hike in future?
I think we need to review and adjust legal documents such as decrees and circulars issued by the Government and the Ministry of Industry and Trade relating to petrol trading. We need to co-operate with the Ministry of Finance to review and adjust the circular guiding the mechanism to form, manage and use the fund for petrol and oil price stabilisation so that we can perform petrol trading under a market mechanism.
Besides, we need to ask wholesalers for a petrol reserve lasting 30 days that ensures a consistent and sufficient petrol supply. We also need to re-define the responsibilities of wholesalers when their subordinate stations stop selling or keep the petrol to wait for higher prices.
We need to tighten the enforcement of legal frameworks on the petrol trading system, including wholesalers and retailers. Lastly, we need to make a process of register for petrol price increases as soon as possible and take appropriate action when the world's petrol price decreases. — VNS