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LPG traders doing very well
Local LPG (liquid petroleum gas or cooking gas) trading companies are actually making handsome profits despite their repeated complaints about suffering losses every time international prices go up.
A Tuoi Tre (Youth) report yesterday noted that the companies typically increase selling prices soon after international prices go up, but when these go down, a corresponding decrease in retail prices takes a long time coming.
The report cited market observers as saying this makes dubious the oft-repeated claims of losses made by the firms.
Since the beginning of this year, local gas prices have been increasing alongside international prices. However, most of gas sold under new, increased prices, had been imported before.
It is fact that when the international prices increase sharply, the quantity gas imported decreases sharply, the report says.
It cited the General Department of Customs as saying that in February, gas companies only imported 19,000 tonnes at US$1,078 per tonne, a decrease of 73 per cent in comparison with January, when the price stood at $927 per tonne.
Therefore, companies were able to earn a huge profit of VND42,000 per 12kg cylinder.
One expert said that gas companies can earn huge profits because fluctuation of international price happens on the basis of "some fixed rules."
"If companies know well these rules and own a big warehouse, they will get huge benefits," he said.
This was seen early this year as companies imported a lot of gas in January and strongly reduced the amount in February.
In addition, gas produced in Viet Nam, from Dinh Co and Dung Quat plants, is also sold at international prices.
It means that the $100 per tonne in insurance and transportation fees that local manufacturers have not paid goes straight into their pockets.
According to the Ministry of Trade and Industry, around 640,000 tonnes of gas from the Dinh Co and Dung Quat plants can meet 50 per cent of local demand.
The Tuoi Tre report said that given the production at home, the Government should control and adjust gas prices when there are big fluctuations in international gas prices in order to benefit consumers.
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