The Oil and Gas Industry Stifled by Vague Regulations

The director of a major gasoline company in the South revealed that her company, along with all other businesses in Ho Chi Minh City, is currently unable to comply with certain provisions related to Decree 80 on gasoline trading due to a lack of implementing guidelines.

“The decree allows businesses to sign contracts to act as retail agents for up to three sources of gasoline, but so far, all enterprises have only been able to obtain supplies from a single source, as directed by the Department of Industry and Trade. We have not received any guidance from the Ministry of Industry and Trade. When we approached the leadership of Ho Chi Minh City’s Department of Industry and Trade, they responded that businesses could only proceed once the Ministry provides guidance. The Department has forwarded their concerns to the Ministry but has not received a response, even after several months. While gasoline companies in other provinces can source from multiple suppliers, those in Ho Chi Minh City are restricted, creating a challenging situation,” she explained.

The general director of a large gasoline company with a chain of more than 10 stores in Ho Chi Minh City shared similar concerns with Tien Phong. In addition to the challenges posed by not being able to source from three suppliers as stipulated in Decree 80, gasoline companies also face numerous difficulties due to ambiguous regulations in the gasoline trade. According to him, the two most recent decrees on gasoline trading, Decree 95 and Decree 80, drafted by the Ministry of Industry and Trade, are problematic. Decree 95 removes the concept of “co-ownership” stipulated in Decree 83/2014/ND-CP, putting numerous gasoline businesses at risk of closure when renewing or reissuing their business licenses.

Representatives of several retail gasoline companies in Hanoi, Quang Ninh, and other northern provinces also reported that they have not been able to purchase gasoline from multiple sources as stipulated. Moreover, major wholesale companies have refused to sell to businesses that source from multiple suppliers, stating that they will only sell to their franchised networks until they receive specific guidance from the management agency.

“VCCI and the Ministry of Justice need to reassess the illegal provisions in the draft decree that is currently open for comments.”

Mr. Hoang Trung Dung, General Director of the Company for Development of Additives and Petroleum Products (APP)

Request to Remove Vague Regulations

At the conference of the industry and trade sector of 28 northern provinces and cities, held by the Ministry of Industry and Trade on May 17, the leaders of the Departments of Industry and Trade of Hanoi, Hai Duong, Quang Ninh, and other localities proposed that the Ministry of Industry and Trade clarify some regulations on gasoline trading and other commercial fields.

Accordingly, the Ministry of Industry and Trade should soon advise the Government to amend and supplement Decree 83/2014/ND-CP and Decree 95/2021/ND-CP on gasoline trading. They suggested considering and amending the regulations to allow agents to purchase from multiple sources, thereby avoiding supply disruptions, promoting healthy competition in the industry, and ensuring the rights and interests of agents and consumers.

According to Ms. Tran Thi Phuong Lan, the Acting Director of the Hanoi Department of Industry and Trade, the units in the industry and trade sector are facing numerous difficulties and obstacles that need to be addressed immediately. There is an overlap of mechanisms and policies, and the issuance of amendments to legal documents is not timely, causing problems in implementation. “The Departments of Industry and Trade of many provinces hope that the Ministry of Industry and Trade will focus on removing bottlenecks in the fields of commercial infrastructure, electricity, and industry. They should also address the obstacles caused by overlapping circulars, decrees, and laws. When a decree is issued, an accompanying circular with detailed guidance should be released simultaneously. Avoiding long waits for guidance will help localities seize development opportunities,” Ms. Lan stated.

At a conference organized by the VCCI to gather feedback from businesses on the draft decree to replace the decrees on gasoline trading, numerous enterprises expressed concerns about the inconsistencies in the regulations on gasoline trading and the provisions that intervene in the freedom of enterprise in the new draft decree developed by the Ministry of Industry and Trade. Mr. Trinh Quang Khanh, Vice Chairman and General Secretary of the Vietnam Petroleum Association (VINPA), proposed removing the vague provisions in the draft decree regarding the mandatory construction of a 2,000 m3 warehouse for gasoline companies. He also pointed out an inconsistency related to Article 13 of the draft decree, which allows companies to source from multiple suppliers without specifying the number of sources available to wholesale companies. “Another question for the drafting agency is why the draft decree removes the provision that distribution traders cannot source from each other, while other drafts, such as Decrees 83, 95, and 80, include this restriction?” Mr. Khanh asked.

Regarding the concerns related to gasoline trading, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said that the Ministry has finalized two draft circulars regulating, amending, supplementing, and repealing a number of provisions in gasoline trading activities. These drafts have been sent for comments from relevant organizations and individuals. The content related to retail gasoline agents being allowed to source gasoline from a maximum of three traders, including wholesale gasoline and oil traders or gasoline distribution traders, is stipulated in the draft circular. Once the circular is issued, the problems will be resolved.