Gas stations in southern Vietnam on verge of shutdown amid falling profits
Gas stations in southern Vietnam on verge of shutdown amid falling profits
Several fuel companies in An Giang Province, southern Vietnam have proposed closing gas stations due to falling profits, stoking fears of an impending fuel shortage.
Though an adjustment made by the central government on Monday will fuel retailers to bring in profits of VND100-300 per liter of gasoline or oil, industry insiders fear such low commissions are not enough to keep gas stations afloat.
“Gas stations can only yield enough profits to survive when they can rake in commissions of VND700-800 per liter. With current commissions, filling stations can only operate in moderation in order to retain customers, but they cannot earn profits,” said an executive from Petrolimex An Giang.
“Gas stations with adequate supplies can continue to operate, but those without sufficient supplies may face a partial shortage."
In Ho Chi Minh City, filling stations are facing a similar dilemma.
According to the director of a filling station in the southern metropolis, the VND452 his company makes per liter of gas sold is just enough to cover operation costs and falls short of the VND500 per liter needed to turn a profit.
Many firms seek to suspend operations
“I have traded fuels for 20-30 years,” said the director of another gas station in Ho Chi Minh City.
“Our commissions [right now] are low, and we don’t know then they will increase. I have even had to sell a gas station to cut costs and losses.”
An executive from the Department of Industry and Trade of An Giang Province told Tuoi Tre (Youth) newspaper that the department had received eight petitions from oil companies for permission to suspend operations during the Lunar New Year (Tet) holiday but rejected the petitions as they went against the regulations.
In addition, the department revoked the licenses of two filling stations owned by Dai Dong Duong Petroleum Joint Stock Company so as to allow for the road they are on to be upgraded in a project slated to last until 2024.
In An Giang Province, 16 gas stations owned by Dai Dong Duong Petroleum Joint Stock Company and Hoa Binh Co. Ltd. are currently out of gasoline.
Previously, Dai Dong Duong had proposed closing 14 filling stations in the Bay Nui (Seven Mountains) area in Tinh Bien and Tri Ton Districts, An Giang Province due to a lack of capital but the department rejected the proposal.
“[16 Dai Dong Duong] filling stations have closed for nearly 20 days," a representative of the An Giang Department of Industry and Trade said.
"Under the prevailing regulations, gas stations can temporarily suspend their operations for a maximum of 28 days.
"On the 29th day, the provincial Department of Industry and Trade and the Market Surveillance Agency will join hands to inspect Dai Dong Duong Petroleum Joint Stock Company and revoke its fuel trading license if its gas stations remain closed."
