Obstacles hinder automated petrol stations

March 23, 2017 - 16:00

All 2,400 gas stations owned by the Vietnam National Petroleum Group (Petrolimex) are designed to accommodate cash free purchases, and can switch to automated pay at the pump model to  help reduce labour cost, specially late at night, said Bùi Ngọc Bảo, Petrolimex’s Chairman.

A customer is guided how to pump petrol in a petrol station in Hà Nội. — Photo doanhnghiep.vn
Viet Nam News

HÀ NỘI — All 2,400 gas stations owned by the Vietnam National Petroleum Group (Petrolimex) are designed to accommodate cash free purchases and can switch to an automated pay model to help reduce labour costs, especially late at night, said Bùi Ngọc Bảo, Petrolimex’s Chairman.

Although automated payment functions are readily available, Petrolimex’s three year test run has yet to be implemented on a larger scale.

In Hà Nội, the company has seven petrol stations with automated pumps for customers paying via credit cards, but they must all be accompanied by normal pumps with workers to supply the demand of the majority who pay by cash.

Bảo stated the main reason behind the automated model failure is price difference; banks charge an additional fee for card-based purchases that is not borne by the customers but the company itself and is not included in the circulation and management fee that Petrolimex pays the Government.

Said transaction fee ranges from 0.5 to 1 per cent of total amount paid for domestic cards and 2.5 per cent for international cards.

The circulation and management fee imposed by the Government is about 5 per cent of total price, including importing costs, storage costs, distribution costs or losses, of which labour costs account for 30 per cent in total.

Furthermore, as petrol prices are regulated by the Government, petrol companies cannot change the price to respond to the market’s elasticity.

In reality, the price recorded at Petrolimex’s automatic stations is only VNĐ100 (US$0.009) per litre cheaper than those with human workers.

This makes customers hesitant to pump petrol themselves, seeing how they will only save a miniscule amount of money even when the drop in price is solely created by Petrolimex to encourage them and is not included in the Government’s regulated price list.

In addition, since motorbikes, the most common vehicles in Việt Nam, do not have a safety switch to stop petrol from being pumped into the tank like cars, spilling is bound to occur and cause danger to the drivers. This is amplified by the lack of etiquette and regard for public safety in people who use mobile phones and smoke within the vicinity of a petrol station, regardless of prohibiting signs.

To counter this, the company has proposed to the Ministry of Finance and the Ministry of Industry and Trade to adjust the operation costs for petrol from 5 per cent to 10 per cent, a common rate in advanced countries, to push for cash-free purchases and the automated pumping model.

If said transaction fee can be included in regulated petrol price, in the next three years, Petrolimex expects to convert 70 per cent of all petrol stations to automatic model, keeping only 30 per cent with workers, said Bảo.

The company aims to make automatic technology more popular to help save time and cut cost for customers and to improve service. — VNS