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Global gas price fall: Vietnamese get no benefit
Most cooking gas consumers are not benefiting from the recent decline in global prices since companies have not passed on the cuts to them despite cutting wholesale prices.
They have cut the prices for retailers by VND5,000 to VND15,000 for a 12-kg cylinder, saying it is meant to compete with private suppliers.
Distributors now enjoy profits of up to VND45,000 ($2.25) per cylinder, but only a few of them have reduced their retail prices, and most consumers continue to pay up to VND380,000 ($19) for a cylinder.
Huynh Ngoc Tue, head of the sales at the state-owned Petrolimex Saigon, said his company had to cut prices for distributors to compete with private suppliers. “[The private suppliers] have reduced prices three times this month, and we must do the same to ensure sales,” he said, adding the cooking-gas market was taking a hit from this kind of competition. “Since they are new to the market, the private suppliers always try to cut prices to attract more distributors and expand market share.”
A spokesperson for a gas company with a large market share in Ho Chi Minh City said the small suppliers could easily offer discounts now to distributors since they imported gas at spot prices quoted at the time of import. Prices have fallen recently by US$60 a ton. “But we cannot do so since we have to depend on the contract price, which is fixed at the end of every month,” he said.
Many gas companies said the contract prices were likely to soar at the end of this month.
Earlier this month they hiked retail prices by VND8,000 after the contract price rose by $25 a ton.
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