Ho Chi Minh City petrol stations close even though there is no fuel shortage
For a while, fuel was nigh impossible to find in the former Saigon. Stations did not want to sell at a loss. Now the situation seems to be under control, but international price volatility means that uncertainty remains.
Ho Chi Minh City (AsiaNews/Agencies) – Some Vietnamese cities could find themselves without petrol after several stations in the capital and its surrounding areas had to close recently because they were selling at a loss.
In Ho Chi Minh City, long queues formed for several days, and frustration is boiling over. On 6 October, out of frustration, a man attacked staff with a knife at a petrol station where he was waiting to fill up his motorcycle. But fuel shortages are not the real issue.
It is true that earlier this month Ho Chi Minh City’s Department of Industry and Trade announced lower imports due to risks from the volatile international prices. However, for local stations, low profit margins aggravated the situation forcing them to close for a few days.
In Vietnam, the government sets retail petrol prices nationwide three times a month, and it is not possible for retailers to raise prices, regardless of what happens on international markets.
This means that their profits depend on the difference between the price paid to suppliers and the price set by the government.
According to retailers, in August and September the government did not take into account the increase in transportation costs, so it set sales prices too low.
“The more we sell, the more we lose. Gas station owners fear they will lose more money and so are reluctant to buy more,” said Giang Chan Tay, owner of six gas stations in Tra Vinh province, speaking to VnExpress.
Even before privately owned stations closed (Petrolimex state-owned stations were forced to remain open), 36 retailers in the former Saigon wrote to Prime Minister Pham Minh Chinh, accusing the ministries of trade and finance of mismanagement.
Le Van My, chief executive of Hoc Mon Commercial Company, said his company reported losses of 8 billion dong (nearly US$ 330,000) so far this year.
The Trade Ministry said it had already told the Finance Ministry to raise prices at least four times, while the latter replied that the Trade Ministry is tasked with ensuring adequate fuel supplies.
On 11 October, petrol prices were raised for the first time in three months. Petrolimex refuelled its stations with at least 80 tankers, while Ho Chi Minh City’s Transport Department allowed fuel lorries to deliver fuel all day in central parts of the city rather than during off-peak hours.
According to journalist Michael Tatarski, since petrol became available again after the price hike, it is clear that there was no real shortage – petrol stations simply did not want to sell at a loss.
Vietnam's fuel imports in the first nine months of the year increased by 132 per cent compared to the same period in 2021, with 40 per cent of imports coming from South Korea (although it is risky to make comparisons with lockdown periods).
After less than a week, the situation seems to be under control. Ho Chi Minh City municipal authorities announced on 12 October that the city had fuel for at least another 10 days.
It is clear though that if petrol prices were to rise further, consumers would be saddled with the extra cost.
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26/10/2021 17:31
