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Domestic petrol price stays same despite world’s fall
Following the crude oil price decreases in the world’s market in the last 10 days, A92 petrol price has dropped to VND5,729/litre (HCM City port), while DO oil has decreased to VND5,503/litre.
With such import and current sale prices, petrol and oil importers are making profit. However, importers do not intend to slash sale prices, while they have even raised commission levels for sale agents.
The DO import price has decreased to $50/barrel CIF HCM City, or VND5,503/litre. This means that every litre of DO oil should be VND9,098/litre after tax, lower by VND1,400/litre than the current retail price.
Meanwhile, A92 petrol price has decreased to $52/barrel, or VND5,729/litre. With the same formula of calculating sale price, the petrol price should be VND10,271/litre, or VND700/litre lower than the current retail price.
Though key petrol and oil importers say they set prices based on supply and demand and always follow the world’s prices, they often don’t cut sale prices when the world’s prices decrease.
The latest price decreases all originated from ‘suggestions’ by the Ministry of Finance. Importers only slashed retail prices when the ministry’s price control agency asked them to ‘register new retail prices closer to the world’s prices’.
Vuong The Dung, Deputy General Director of Petrolimex, which is now holding 60% of the market share, said that while the world’s DO price has decreased, he said the domestic price could not be lowered immediately, as importers can only sell products at new prices when they import at new prices.
Meanwhile, petrol distributors have decided to raise commissions for sale agents. DO retailers now can get the commission of VND1,100-1,200/litre, while the commission was VND700-800/litre previously.
Importers have also attributed the tardiness in cutting retail prices to the unclear mechanism on compensating importers for losses. “I don’t know if I am making profit or loss with sales, as inventory products and new imports have been mixed, while the mechanism on compensating us for losses remains unclear,” said the director of a petrol and oil import company.
According to him, several companies did not import products to sell domestically when they found prices overly high. Meanwhile, other companies still imported products to sell per granted quotas, and they suffered from high import prices and lower sales prices. While they had yet to recoup their losses, other companies imported new products at lower prices and sold domestically, while offering competitive commissions for sales agents.
“With the currently applied petrol and oil price management mechanism, some enterprises can make fat profit, while others suffer heavy losses,” he said.
VietNamNet, TP
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