Low imports cause gasoline shortage

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Cutting commissions for retailers amid fluctuating global prices is also a factor, Hai told reporters on Tuesday. Fuel retailers said they were suffering losses after their commissions were cut and many want to close.

Wholesalers were importing gasoline and oil when their world prices jumped, sometimes by 57 to 85 percent compared to the same period last year, but they had to sell them at lower prices.

Currently, the Vietnamese authorities adjust retail fuel prices every 10 days based on the average prices of the previous 10 days. However, many people, including lawmakers, have said that this cycle is no longer suitable because it leaves domestic prices obsolete compared to world prices, which have been volatile lately.

Hai said wholesalers have to cover different costs such as freight to bring imported gasoline and oil to Vietnam or to transport locally produced fuels to ports in the country, but the costs used by the ministry to calculate the price of basis are lower than the actual costs incurred by wholesalers.

For these reasons, wholesalers suffered losses, so they reduced imports and cut commissions for retailers, he said.

Other reasons for the partial fuel shortage include lower production at two domestic refineries and the absence of some wholesalers, Hai said.

The two refineries produced 9.7 million tons of gasoline and oil in the first 10 months, some 170,000 tons less than the annual plan, according to the Ministry of Industry and Trade.

Several southern wholesalers have had their business licenses revoked for administrative misconduct, and others have had the clearance of imported fuel suspended for failing to meet customs requirements such as electronic data connections.

The Ministry of Finance has agreed to take into account an increase in the transport cost of importing fuel, which will allow for higher retail prices.

Costs are 290-560 VND (1.2-2.3 cents) higher for a liter of petrol and 160-660 VND for diesel, and are reflected in retail prices from November 11.

Another solution is to increase national reserves of gasoline and oil, Hai said, noting that current reserves are equivalent to only 5 to 7 days of consumption.

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