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Petrol distributors suffer huge losses: Minister

Update: January, 07/2012 - 09:42

 

An oil tanker receives processed oil from the Dung Quat Oil Refinery in Quang Ngai Province. Petrolimex is one of the key customers of the Dung Quat Oil Refinery. — VNA/VNS Photo Thang Long
HA NOI — Audit reports showed that petrol distributors had suffered a huge loss worth VND10 trillion (US$476.2 million) in the past four years (2008-11), though they received compensation for such losses from the State, Minister of Industry and Trade Vu Huy Hoang said yesterday.

In an online dialogue on Government website chinhphu.gov.vn, Hoang said that a commission worth VND600 per litre of petrol for fuel dealers regulated by the Ministry of Finance was inadequate due to high input costs. As a result, the commission could not cover dealers' manufacturing and overhead costs.

Petrolimex, one of 12 major petrol distributors, therefore, was forced to pay a higher commission to its dealers. As the commission costs were not included in the petrol selling prices, Petrolimex paid for the additional costs, causing the corporation to suffer losses.

Hoang made the comment in response to a question raised by Nguyen Xuan Thuy from Thanh Hoa Province regarding the reasons for Petrolimex' losses.

In regards to the petrol price stabilisation fund, Hoang said that the fund was carried out under Government Decree 84, emphasising its role in stabilising the domestic petrol prices during the fluctuation of the global oil price.

Trade deficit

At the dialogue, Hoang said that the country's trade deficit would be minimised gradually to help balance exports and imports by 2020. However, this required much effort from ministries, businesses and society.

He responded to a question from Nguyen Tri Hoang from Ha Noi regarding whether or not Viet Nam would be able to escape a trade deficit by 2015. He said that last year, Viet Nam's trade deficit was $9.5 billion, accounting for 9.9 per cent of the total export revenue and much lower than 16 per cent as planned.

"A year-on-year decrease of 25 per cent in the country's trade deficit last year was earmarked as the first year that saw a closer balance of trade between export and import revenues."

In the past years, Viet Nam had heavily relied on imports to serve economic development as the country did not produce many types of machines, equipment and fuel. Such imports helped boost production and economic growth.

Of the imports, essential goods including machines, equipment, fuel and materials accounted for 80 per cent. Unessential goods amounted to only 7 per cent of the total imports.

As mechanical and supporting industries were still low, the country was still forced to import, Hoang said.

Ho Ngoc Thang from HCM City asked the ministry to boost the 2012 export growth as both the global and domestic economies were in a downturn and several key export markets were facing public debts woes across European countries.

Answering the question, Hoang said that this year, Viet Nam aimed to reach an export growth of 13 per cent, or equivalent to $108 billion. To fulfil the target, MoIT would help businesses access loans more easily while focusing on national trade promotion to take advantage of key products.

Several new export markets would be open, including the Middle East, Africa and Latin America.

Advantages for exported Vietnamese products under Free Trade agreements would be explained nationwide in order to help boost exports of local products, alongside a faster warning system in regards to foreign countries' trade barriers.

The Viet Nam Association of Young Scientists and Engineers questioned the minister about solutions to boost local production in the context of a possible increase in imports, as many import tariffs are to be cut following Viet Nam's commitment to the World Trade Organisation (WTO).

In response, Hoang said that under the country's commitment to the WTO and other bilateral trade agreements, Viet Nam was planning to reduce or cut many tariffs on different schedules based on each domestic product's competitiveness.

Before signing, MoIT gathered many opinions from businesses, associations, ministries and the Viet Nam Chamber of Commerce and Industry in order to negotiate schedules of tariff cuts to reserve sufficient time for domestic producers to increase their competitive edge. However, Vietnamese manufacturers should improve their designs to attract customers, Hoang added. — VNS

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