At the Ministry of Industry and Trade’s regular press conference for the third quarter of 2024, held on October 23, Mr. Phan Van Chinh, Director of the Domestic Market Department, stated that the Draft Decree replacing the Decrees on gasoline and oil business (Draft Decree) prohibits traders from buying and selling among themselves to ensure effective management and reduce intermediary stages and costs.
“This regulation was proposed after inspections, examinations, and investigations by competent authorities, who then made recommendations to the Ministry of Industry and Trade and the Government,” Mr. Chinh emphasized. He also affirmed that these regulations were carefully considered to promote competition and protect the interests of enterprises.
During the drafting process, the Ministry received numerous comments from businesses in general and distributors in particular. “Enterprises are allowed to do what is not prohibited by law,” Mr. Chinh said. “However, for conditional business lines like gasoline and oil, enterprises must fully comply with the conditions.”
The gasoline and oil supply chain consists of three levels: the sourcing segment (key suppliers), distributors, and retailers. Decree No. 80/2023/ND-CP of the Government amends and supplements several articles of Decree No. 95/2021/ND-CP dated November 1, 2021, and Decree No. 83/2014/ND-CP dated September 3, 2014, on the gasoline and oil business. The Government has approved the elimination of intermediary stages such as general agencies.
“We are managing according to a straight chain, not a horizontal one,” emphasized Mr. Chinh, adding that the conditions for becoming a distributor and a retailer are entirely different. Enterprises must meet the conditions specific to their segment, with no discrimination.
A new feature of the Draft Decree is the diversification of the retail segment. Even the display of signs and logos is left to the agreement between the two enterprises, in accordance with legal regulations, without state intervention.
For gasoline and oil distributors in the Draft Decree, many conditions have been reviewed and removed, such as the requirement for distributors to maintain a five-day gasoline and oil reserve and certain regulations regarding storage facilities. On the other hand, key suppliers now have additional conditions to hold them accountable for their role in creating sources for distribution. This is coupled with the application of digitalization for more accessible and effective control across the entire supply chain.
Additionally, Deputy Minister Nguyen Sinh Nhat Tan shared that the Ministry of Industry and Trade has been receptive and proactive in organizing conferences and seminars to gather feedback during the drafting process. The Ministry will develop two schemes regarding distributors and seek the opinions of Government members. With the current 30 key suppliers, a competitive market in the gasoline and oil business can be fostered.
“Mitigating Risks and Facilitating Trade for Market Participants.”
The Ministry of Industry and Trade will conduct a comprehensive review and impact assessment of the draft decree on relevant stakeholders. This will ensure the refinement and perfection of the draft decree, aligning it with the initial direction and purpose of its creation.
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