The Ministry of Finance has set up three teams to audit pricing practices of the country's four leading petroleum distributors, Petrolimex, PetroVietnam Oil Corporation, Sai Gon Petro Co Ltd and Dong Thap Petroleum Trading Co Ltd (Petimex).
A petrol station in Tran Quang Khai Street, Ha Noi. The Ministry of Finance has set up teams to audit the pricing practices of the country's leading petroleum distributors. — VNA/VNS Photo Tran Van Giap
HA NOI —
Teams will audit prices set by these distributors between January 1 and September 15, 2011, relative to their expenses and trading volumes, the ministry said.
The ministry is also taking a close look at disbursements from the Petrol Price Stabilisation Fund as of mid-September.
At a meeting held by the ministry on Tuesday, Bui Ngoc Bao, general director of the leading petrol distributor Petrolimex – which accounts for 60 per cent of total domestic market shares – said his corporation had suffered an enormous loss of VND1.8 trillion (US$86.5 million) in the first nine months of the year.
Minister of Finance Vuong Dinh Hue questioned this, however. Even though petrol prices had been reduced by VND500 per litre on August 26, petrol distributors were still enjoying a profit margin of VND780 per litre, according to computations by the General Department of Customs – in addition to the fixed profit of VND300 allowed by the Government.
Bao held a press conference on Wednesday to try to clarify the discrepancies.
The ministry's varying calculations were based on the "temporary price" which petrol importers have to declare to the General Department of Customs, which was not the final price paid, he said.
Contracts signed with foreign petrol suppliers were also based on futures markets, highly vulnerable to fluctuations in global oil prices, Bao added. Foreign exchange fluctuations also added a risk factor, since actual payments for fuel imports were conducted a month after the purchases. Meanwhile, imported petrol had to be sold at fixed prices set by the Ministry of Finance.
Prior to the August 26 petrol price reduction, he said, the cost of A95 petrol was VND21,858 per litre while the retail price was VND21,800, resulting in losses of VND58 per litre. However, Petrolimex was earning VND219 per litre on the more popular A92 petrol and VND289 per litre of diesel. After price reduction, Petrolimex began to lose VND412 per litre on A95 petrol and VND135 per litre on A92 while continuing to earn a small margin on diesel.
As petrol distributors suffered losses against the ministry's aim to stabilise the domestic market, there was no price competition among the 11 petrol distributors nationwide, puting consumers at a disadvantage, Bao added. — VNS