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CAD suggests restructuring key petroleum importers
The Competition Administration Department (CAD) under the Ministry of Industry and Trade, in its report about the competition in 10 business fields, pointed out that the group monopoly is controlling the domestic petroleum market.
According to Tien phong newspaper, petroleum importers have been making profit over the last month thanks to the decreasing petrol price in the world market. However, none of them intends to reduce the retail prices.
According to Petrolimex which holds 60 percent of the market share, the average A92 petrol price in Singapore in the last 30 days stood at $84.46 per barrel. By October 15, the enterprise had been making the profit of 921 dong per every litre of petrol sold, after paying taxes and fees.
As for 0.05S diesel, the enterprises are making the profit of 910 dong per litre, while the sale of kerosene can bring the highest profit, at 1122 dong per litre. Mazut brings the lowest profit, at 379 dong per litre.
People have been expecting the petroleum products’ price to decrease over the last few weeks. And they get angry when realizing that petroleum importers and distributors do not plan to lower the retail prices.
Once again, a question has been raised of why importers raise retail prices when the world prices increase but do not reduce the retail prices when the world prices decrease. People have demanded that the players on the petroleum market be analysed in order to set up reasonable pricing mechanism.
According to CAD, five enterprises are now considered as holding the biggest market shares, and among them, Petrolimex has a surpassing strength in comparison with the other four enterprises (Petec, PV Oil, Saigon Petro and Mipeco).
There are 10 enterprises which import and distribute petroleum products on the domestic market. However, in fact, the market has been dominated by Petrolimex for many years.
In the air fuel market, Vinapco is still the only fuel provider , holding 100 percent of the market share.
Therefore, according to CAD, the current petroleum market is still the market of group monopoly.
A recent survey conducted by CAD shows that the state’s intervention into the petroleum pricing, with the use of its financial tools, has “distorted” the petroleum price mechanism.
Though the cost prices of importers are quite different, and different distributors have different business conditions and material facilities, the retail prices applied by the distributors on the market are always the same. Therefore, analysts say that the petroleum distribution network in Vietnam comprises the “one-price” stations, while there is no price competition among the enterprises.
According to CAD, in order to create a market with healthy competition, it is necessary to restructure the market by restructuring key import enterprises. In other countries such as Thailand, China and Malaysia, though there are only three key petroleum importers, the competition is always very stiff. Meanwhile, though Vietnam has 10 importers, the competition is weak.
“In order to take full advantage of the state’s resources and narrow the gaps in the market shares held by enterprises, the State should merge some key import enterprises which are holding small market shares,” CAD has suggested.
Commenting on the monopoly in the petroleum distribution sector, Dr. Le Dang Doanh, a well known economist, said that there exist big natural barriers in the sector. Vietnam’s petroleum market is now open, but it is not easy to join the market because enterprises have to meet strict requirements in terms of filling stations and depots.
Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management, also thinks that it is necessary to analyse more deeply the structuring of the service sector in Vietnam. He said that in principle, there should not be too many enterprises operating in the same sector.
vietnamnet, Tien phong
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