On the morning of June 14, Minister of Industry and Trade, Vu Huy Hoang faced a Q&A session with NA deputies which mainly focused on the monopolies in the electricity and petroleum sectors.
Policy makers cautious about ending electricity and petroleum monopolies
Hoang confirmed that in terms of the electricity industry, Electricity of Vietnam (EVN) remained the only group responsible for transmitting and distributing electricity.
Hoang admitted that if this situation continued, it would obviously affect competition in electricity market, leading to poor development in the field.
However, he noted that the Government had laid out a road map to eliminate a monopoly in the electricity market, which included ended all monopolies, not just those based on state industries.
A competitive electric market would be officially launched this July. All electricity companies would have the right to make offers to the National Electricity Centre.
Until 2014, the electricity wholesale market will be shaped, creating the basis for the electricity retail market to operate from 2022.
The minister agreed with Binh Phuoc Province’s NA deputy Bui Manh Hung, that the road map was very long, as it had begun in 2004.
Hoang explained that electricity market was a new field for Vietnam and many complicated problems would need to be overcome during a long time period.
Moreover, the minister emphasised that electricity production and distribution had a unique position, due to its effect on the entire economy and therefore changes had to be carefully made.
NA deputy Bui Manh Hung opposed the explanation arguing that the time period just meant the economy would suffer for a longer period of time.
Hung emphasised, “Electricity and telecommunications are both important sectors in an economy. We are moving to abolish the monopoly in telecommunications, and it is developing well, and bringing benefits to the economy. Why do we have to spend 17 years eliminating a monopoly in electricity industry?”
According to Hung, the minister should be made responsible for shortening the road map. “Are you lacking responsibilities and confidence in our people?” Hung blustered.
Hoang confirmed that of course he was responsible, but insisted that the switch to an open electricity market could have potential dangers.
Second, in petrol distribution, market management agencies are attempting to end the monopoly. There are now 12 enterprises specialising in importing and distributing petroleum nationwide. They are both state-owned and private-run companies.
Hoang attributed Petrolimex’s monopoly to historic issues. Petrolimex continues to play an important role in distributing petroleum, so its actual market share has remained around 60%. Furthermore, in the process of rebuilding the country, Petrolimex had prioritised the nation interest.
Hoang added that the government still banned foreign companies from importing petroleum to Vietnam.
At the end of the Q&A session, the minister admitted he should have discussed the ending of the monopolies in more detail with his government colleagues.