Call to reform gas distribution
Call to reform gas distribution
The Viet Nam Gas Association has called for the management of the gas market to be tightened to prevent fake gas being sold and to create a healthy environment for gas businesses to do business in Viet Nam.
Vice president of the association, Le Thi Anh Man, said that illegal gas extraction remains rife, despite efforts to tackle the problem and improvements recorded in some localities.
She said that this may be one of the reasons that some large companies have finished their involvement with the gas business in the country.
Most recently, Royal Dutch energy and petrochemical giant Shell sold its liquefied petroleum gas business in Viet Nam to Thailand's Siam Gas Company. Shell claimed that the transaction was in line with the company's strategy, despite them having been the leading brand in the country with a market share of 2-3 per cent and a nationwide distribution system.
They are the latest company to withdraw from Viet Nam's gas market, following the US's Mobil Unique Gas in 2006 and the UK's BP Gas in 2009.
According to the association, there were about seven foreign companies currently operating in Viet Nam after the exit of Shell, occupying around 10 per cent of the market share.
Nguyen Sy Thang, the association's president, said that the growth rate of the gas market this year was expected at between 5 and 6 per cent, equalling only half the figures of previous years. He added that gas inventories were also high, pushing companies in difficulties.
Man added that fake gas was the biggest worry to both domestic and foreign enterprises as preventative measures were still not strong enough.
She also named the appropriation of gas tanks as another major concern. Tanks are the biggest asset to a gas company, normally accounting for 60-80 per cent of the company's total assets. However, according to the association's statistics, only about 40 out of 200 gas companies and stores have their tank model registered.
In recent times millions of gas tanks were not returned to their original owners, according to the association. They estimate that fake tanks make up 30 per cent of the total number in the market.
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