service stations close but there is no lack of fuel

For several days it was impossible to get fuel in old Saigon. Distributors did not want to work at a loss. Now the situation seems to be under control again, but due to the volatility of international prices, it is not certain that the risk has disappeared.

Ho Chi Minh City ( / Agencies) – Some cities in Vietnam could run out of fuel. Numerous service stations in the capital and its surroundings have closed in recent weeks because they were working at a loss. Long queues formed in Ho Chi Minh City for several days, and on October 6 a frustrated man attacked staff at a gas station with a knife where he was waiting to refuel his motorcycle.

Unlike other countries, Vietnam seems to have fuel shortages only in appearance. It is true that earlier this month the Ho Chi Minh City Department of Industry and Commerce announced lower gasoline imports due to risks stemming from price volatility on the international market.

However, according to local retailers, what aggravates the situation and forced the distributors to close for several days have been the casualties fuel commissions.

In Vietnam, retail gasoline prices are set by the government at the national level three times a month and retailers cannot increase prices, regardless of what happens on the international market. This means that their profits correspond to -and depend on- the difference between the price paid to suppliers and the price set by the government.

Retailers say that in August and September the government failed to take into account rising transportation costs and set selling prices too low. “The more we sell, the more we lose. Service station owners are afraid to keep losing money and therefore are reluctant to buy more fuel,” he told VnExpress Giang Chan Tay, owner of six gas stations in Tra Vinh province.

Even before the private stations were closed (state stations such as Petrolimex were forced to remain open), 36 former retailers from former Saigon sent a letter of complaint to Prime Minister Pham Minh Chinh accusing the Ministries of Commerce and mismanagement economics. Le Van My, CEO of Hoc Mon Commercial Company, said that in 2022 his company has recorded a loss of 8 billion dong (almost 333,000 euros).

Immediately the two ministries blamed each other for the incident: the Ministry of Commerce claimed that it had already told the Ministry of Economy at least four times to raise prices, while the latter responded that it is the duty of the Ministry of Commerce to guarantee adequate supply. made out of fuel.

On October 11, for the first time in three months, gasoline prices skyrocketed. Petrolimex supplied its stations with 80 tanker trucks, and the Ho Chi Minh City Department of Transportation, for its part, allowed fuel trucks to circulate through the streets of the city center all day (usually only during business hours). less activity).

According to the journalist Michael TatarskySince the fuel became available again immediately after the price increase, it has not been a true shortage. The service stations simply did not want to continue working at a loss. On the other hand, fuel imports from Vietnam in the first nine months of the year increased by 132% compared to the same period in 2021, with 40% of imports coming from South Korea (although it is risky to make comparisons with periods of lockdown).

The situation seems to be under control again for less than a week. The Ho Chi Minh administration assured on October 12 that the city will have fuel for at least another 10 days. However, it is clear that if gasoline prices rise again, the burden of the situation could fall on consumers.