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New petrol prices may still mean “one price” only   2009-10-21 - VietNamNet

Policy makers, on announcing the new petrol pricing scheme Decree 84, hope it will create a competitive market. However, experts are warning this may not happen.


For many years, the petrol market in Vietnam has been “one-price” only as a result of the Government deciding the ceiling price.


Therefore, through Decree 84, which gives back the right to define the retail prices to businesses, change is expected.


However, a representative of Petec said the wish may not come true.


He says small companies always import petrol products in small consignments, which means they have to bear higher transportation and storage fees than larger enterprises.  The production cost is always higher than that of big enterprises.


In theory, small companies will set higher retail prices than big companies. However, companies will not dare to because higher prices will make products unsalable.


Meanwhile, if larger companies, such as the National Petroleum Import - Export Corporation (Petrolimex) sells products at higher prices than smaller companies, then small companies would be stupid not to raise their prices.


In other words, according to the Petec’s officer, Petrolimex, who holds 60 percent of the market share, will still be the decisive market voice.


When asked to comment, deputy general director of Petrolimex Vuong Thai Dung said Petrolimex cannot prohibit other enterprises selling products at the same prices as Petrolimex.


However, Dung denies that Petrolimex will decide the retail price on the market. He said that Petrolimex holds just 35-40 percent of the market share in favourable localities like HCM City, Quang Ninh, Da Nang, Can Tho and Vung Tau, not big enough to control the price


Deputy Minister of Industry and Trade Nguyen Cam Tu said the compilers of Decree 84 hope the document will create a competitive market, which will force the retail prices down to benefit consumers.

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