Washington [US], March 7: Many gas stations in Hanoi have stopped selling fuel, while in the south, supply is scarce, severely disrupting the petroleum market despite the Ministry of Industry and Trade and leading businesses claiming there is no shortage.
Why did the distributor reduce sales volume?
That's the assertion of a petroleum sales manager in Dong Nai when speaking with us. According to him, reserves (both in warehouses and on ships offshore) to supply the market are sufficient to last until the end of the month. However, he is losing money selling retail, and wholesalers are also losing money if they increase sales. Therefore, the supply to retail businesses is only trickling in.
"Currently, the company has 8 retail gasoline stations, selling an average of 40-50 m³ to the market each day. Yesterday (March 6th), we pleaded with the warehouse for a long time before we received 11 m³, meaning we only have 20-25% of the stock we need. With the current supply, the company only has enough to sell for March 6th; we won't be able to sell for the next two days of the weekend. If the supplier doesn't provide, what will we sell?", he asked, and frankly stated that his company is willing to accept losses and zero discounts, yet still doesn't have enough stock. Meanwhile, consumers in many places are stockpiling gasoline. "Therefore, at the company's gasoline station, we have posted a sign clearly stating: 'For fire safety reasons, the station does not sell gasoline in cans or drums for storage.'" "We ask for your understanding." However, the number of customers buying gasoline has increased by 30-40% compared to normal days, putting considerable pressure on any gas stations that still have fuel to sell," he said.
In Lam Dong province, Mr. Nguyen Xuan Thang, Director of Hai Au Phat Company, which operates four retail gasoline stations, said that they usually import five tanker trucks, equivalent to 95,000 liters of gasoline. Last week, when prices started to rise, the supplier reduced the supply to 3.5 trucks, and this week they only received one truck, equivalent to 19,000 liters. "The company has ordered more fuel since the price adjustment, with a 20 dong discount, accepting losses, but as of the afternoon of March 6th, we still haven't received any. To be able to serve more customers, the stations are forced to limit the amount sold. Cars are only allowed to buy fuel for 300,000 - 500,000 dong per trip, not full tanks or 1 million dong per trip as before," Mr. Thang shared.
In fact, prior to the price adjustment on the afternoon of March 5th, many gas stations reported limited supply and hoped for abundant stock after the adjustment. However, as of yesterday afternoon (March 6th), the situation remained unchanged. Mr. Nguyen Hung Viet, a gas station owner in Can Tho, inquired with suppliers but found none available. A gas station in Vinh Long was informed by its supplier that supplies would arrive today (March 7th). In Khanh Hoa , the owner of a gas station in Phan Rang said that the station had to stop selling from March 4th to 5th. They hoped for stock after the price adjustment, but as of today (3 PM on March 6th), the supplier has still not supplied retail customers.
In Hanoi, many stores have displayed signs indicating they are out of stock. On the afternoon of March 6th, the Hanoi Department of Industry and Trade also announced that it had received a request from Indel Investment and Development Joint Stock Company to temporarily suspend business at all retail gasoline stations in the coming period if the supply and discounts on gasoline do not improve.
The more we sell, the more we lose because world prices have risen too sharply.
On March 6th, the Ministry of Industry and Trade affirmed that the domestic supply of petroleum products in March was "basically guaranteed," thanks to a combination of reserves, domestic production, and imports. According to the Department of Domestic Market Management and Development (Ministry of Industry and Trade), major petroleum distributors are continuing to import refined petroleum products to supply the market, despite increased import and transportation costs. Domestically, the two major refineries, Dung Quat and Nghi Son, are maintaining normal operations, ensuring the supply of petroleum products to the distribution system according to signed contracts until the end of March. The Ministry also stated that according to a report from the Vietnam National Energy Industry Group (PVN), crude oil production currently stands at approximately 180,000 barrels per day. Of this, about 150,000 barrels per day are supplied to the Dung Quat Refinery, which can operate at 118% capacity until the end of April, ensuring the supply of petroleum products according to contracts signed with major distributors. Similarly, the Nghi Son refinery maintains stability, ensuring a steady supply of raw materials for its production plan in the coming period.
"With the regulated circulating reserves at enterprises, the supply of petroleum products to the market in March is basically guaranteed," the Ministry of Industry and Trade affirmed. However, the Ministry also acknowledged that if the conflict in the Middle East continues into April, the global energy market will face more volatility. Therefore, the Ministry advised petroleum businesses to maintain a stable supply to the distribution system, not to hoard goods or sell cautiously waiting for prices to rise. In particular, they should diversify their supply sources from imported gasoline to imported crude oil.
So why are wholesale businesses restricting sales? According to some distributors, wholesalers are hesitant to supply large quantities because the more they sell, the more losses they incur, so they only supply within the limits of signed contracts. This is because domestic prices are rising, but world prices are increasing even more sharply. Specifically, it is estimated that as of March 6th, imported gasoline and diesel prices are higher than domestic selling prices by approximately 3,000 - 12,000 VND/liter or kg. Gasoline prices are 3,200 - 3,700 VND/liter higher; diesel prices are nearly 7,000 VND/liter higher; and kerosene prices are 12,000 VND/liter higher. One gasoline and diesel business shared: Gasoline and diesel prices have just been adjusted upwards by 2,000 - 7,000 VND/liter, but world prices are increasing daily. Today (March 6th), diesel prices are already 7,000 VND/liter higher than yesterday. After adjusting for the continued rise in world prices, distributors are incurring further losses. Therefore, even though supply is assured, it is limited because selling more means greater losses.
Sharing the same view, Associate Professor Tran Hoang Ngan, a National Assembly representative from Saigon University, also believes that the fuel price adjustment period should be shortened, as it cannot wait until the end of the week as stipulated. The most important thing right now is to prioritize stabilizing the domestic fuel market. He stated that this is not the first time the global fuel market has experienced instability. In the past, there have been at least two shocks related to oil prices. These were in 2008, during the global economic crisis, when oil prices at one point surged to $150 per barrel; and in 2022, during the Russia-Ukraine conflict, when oil prices also rose to $120 per barrel, causing domestic gasoline prices to briefly jump to 32,000 VND per liter. "This shows that we have a lot of experience in managing gasoline and diesel prices when the market experiences sudden spikes. Now, we need to use those tools proactively, flexibly, promptly, and in accordance with reality. The number one priority is stabilizing gasoline and diesel prices. To achieve this, we must quickly use tools to reduce taxes and fees, including environmental protection tax , value-added tax, special consumption tax, and import tax (if any). We must use fiscal policy to reduce the rate of increase in gasoline and diesel prices in line with world prices," Associate Professor Dr. Tran Hoang Ngan emphasized.
In its directive, the Ministry of Industry and Trade also requested that key petroleum traders continue importing refined petroleum products to supply the market, despite the tendency for import and transportation costs to increase.
Source: Thanh Nien Newspaper