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Petrol market needs private distributors: experts
Experts believe that in order to have a healthy petrol market, Vietnam should open its market to foreigners and domestic private distributors.
Though the government of Vietnam has announced it will float the petrol price, domestic prices still aren’t in harmony with the world’s prices. The world’s crude oil price dropped to $84/barrel on October 14 and $68.57/barrel on October 16, while domestic petrol distributors either kept prices unchanged or reduced them very slightly, by VND500/litre.
Bui Kien Thanh, senior economist: It is necessary to equitise petrol distribution enterprises
Petrol importers and distributors are all quiet and seemingly have no intention of cutting petrol sale prices, even though the crude oil price has been falling sharply in the world’s market. The silence has been explained by the fact that they had to import petrol at high prices before, and they now still have to sell petrol at high prices to cover expenses. However, it is worthy to note that the import volumes of different importers were different.
Vietnam’s petrol market remains ‘neither fish nor fowl’. The 11 key petrol distributors are still state-owned enterprises in nature. Petrolimex is still leading the market, and it always decides the market price.
As for the retail market, we have opened our market more widely than the committed level. As 100% foreign-owned retail groups can come to Vietnam sooner, Vietnamese consumers can enjoy better distribution services. The same thing can be applied with the petrol market, which will benefit consumers.
In the immediate time, I think Vietnam should allow the participation of private investors in the market. We need to equitise the 11 petrol distribution enterprises. 11 distributors may be a lot, but it is still not enough for a competitive market that lacks the participation of foreign and private distributors.
Vo Tri Thanh, Director of the Department for International Integration Studies under the Central Institute of Economic Management (CIEM): Petrol reserve depot needs consideration
There is a very important tool other countries in the world use to stabilise the petrol market: the national petrol reserve depot. The state can sell petrol from the depot when necessary, which proves to help stabilise prices more effectively than spending money to compensate importers for losses.
The petrol reserve depot, of course, will require great expense. However, I think that with a market of nearly 100mil people and with increasing demand, we need to think of an effective tool to ensure energy security.
VNN
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