Many private stores closed, is there a shortage of gasoline supply?

According to statistics from the General Department of Taxation, by the end of March, the country had 15,935 gas stations, down from 17,000 at the end of last year, meaning 1,065 gas stations had closed.

Over the past 3 months, Mr. Nguyen Van Cuong (Ly Nhan, Ha Nam) has had to complete procedures to lease all 5 of his family's gas stations because the business was not effective.

According to Mr. Cuong, leasing a gas station helps old investors not to worry about business but still have a stable source of income. Meanwhile, new investors do not have to invest in infrastructure, do not have to worry about business license procedures, import goods but rely on old sources to reduce time and reduce business costs.

Mr. Bui Ngoc Bao, Chairman of the Vietnam Petroleum Association, explained that when world oil prices increase and inventories increase, petroleum businesses make profits. But when world oil prices decrease and inventories increase, domestic businesses suffer losses.

This situation has been going on for several years now because the market fluctuates erratically, causing instability for businesses, making petroleum business activities have disproportionate profits and heavy losses, plus increasingly strict regulations such as electronic invoices also require investment costs.

"The profits from petroleum business in recent times of many enterprises are almost zero. In addition, banks assess risks in petroleum business more strictly, so it is very difficult for enterprises to access loans, so some private enterprises cannot bear the costs and have to leave the market," said Mr. Bao.

Mr. Hoang Trung Dung, General Director of the Petroleum Additives and Products Development Joint Stock Company (APP), also stated that the petroleum business has never been as difficult as it is now. He cited an example: a gas station that sells 1,000 liters per day, but due to the very low discount, only makes a profit of 400,000 VND, while the gas station has to invest billions.

However, the closure of more than 1,000 private gas stations and the return of their licenses does not affect the supply, because the number of closed gas stations only accounts for about 6%.

Mr. Dung also emphasized that even if all private gas stations closed, the impact on the market would not be significant, because the total gasoline output supplied to the market by private gas stations only accounts for about 18 - 20%.

"State-owned enterprises such as: Vietnam National Petroleum Corporation (Petrolimex); Military Petroleum Corporation (Mipec); Vietnam Oil Corporation (PV Oil); Ho Chi Minh City Petroleum Company Limited (Saigonpetro)... have covered nearly 80% of the market, so they still ensure domestic energy security," Mr. Dung said. The Government and the Ministry of Industry and Trade have repeatedly asked businesses to proactively reserve to ensure national energy security and prevent a shortage of gasoline on the market.

Ms. Nguyen Thuy Hien, Deputy Director of the Domestic Market Department (Ministry of Industry and Trade) also said that since the beginning of 2024, 16 traders have requested to return their petroleum business licenses and the ministry has revoked the certificates at the request of the enterprises according to regulations.

"The entry and exit of businesses in general still happens regularly, and the petroleum business, a conditional business item, is no exception. In 2023, there was a time when the number of petroleum distributors reached more than 330. Up to now, there are still 298 distributors participating in the market," said Ms. Hien.

According to Ms. Hien, if businesses and traders do not continue to trade in petroleum, they will transfer or lease their facilities to other petroleum businesses to continue their business. Thus, basically, petroleum stores will still operate normally.

To ensure the supply of gasoline, the Ministry of Industry and Trade has assigned the minimum total source (including imported and purchased domestic gasoline) to key gasoline trading enterprises.

"Since the beginning of the year, basically, petroleum business hubs have strictly implemented the minimum total source of assigned petroleum supply, meeting enough demand. It is estimated that the total source of imported and purchased domestic petroleum in the second quarter of 2024 is about 6.35 million m3/ton of all types; consumption is about 6.3 million m3/ton; inventory is from 1.7-1.8 million m3/ton. Therefore, there will be no shortage of petroleum supply," said Ms. Hien.