There are currently about 30 enterprises (EEs) importing gas nationwide. After inspecting major players such as Petrolimex Gas Joint Stock Company, Southern Gas Trading Joint Stock Company, Northern Gas Trading Joint Stock Company, Anpha S.G. Petroleum Gas Joint Stock Company, and PV Gas (PetroVietnam), the Ministry of Finance Inspectorate concluded: At all stages—from import, production to distribution—gas activities are not organized or managed scientifically, leading to high and volatile gas prices, mostly trending upward.
The domestic production cost of gas is very low compared to imported gas. While imported gas prices range from VND 10,000 to 16,268 per kg, domestic production costs only VND 2,391 to 3,748 per kg. However, the retail price to consumers is pushed up to VND 14,718 to 21,791 per kg!
The Ministry of Finance Inspectorate also noted that the State has no pricing management mechanism for gas business activities, resulting in tax losses; consumer rights regarding pricing, product quality, and gas safety are not protected.
Due to the lack of a comprehensive plan for gas trading enterprises, there are too many small-scale distributors who do not invest in tank facilities, leading to weak, fragmented storage capacity. Gas imports are conducted in small, scattered shipments with uncontrolled quality.
Import gas prices also vary significantly among enterprises at the same time. For example, in early 2007, while Saigon Gas imported at VND 8,944 per kg, Petrolimex Gas declared VND 10,460 per kg. In June 2008, Southern Gas Trading Joint Stock Company imported at VND 15,523 per kg, while Petrolimex Gas imported at VND 16,744 per kg...
PV Gas—the only domestic gas producer—accounts for over 30% of the nation’s total gas consumption, mainly from the Bach Ho gas field, with very low input and production costs since depreciation has been fully amortized.
On average, production costs were only VND 2,391 per kg in 2007 and VND 3,748 per kg in 2008. The Ministry of Finance Inspectorate pointed out that while domestic production costs are much lower than imported gas costs, PV Gas offered discounts to distributors at very low rates compared to imports: only 0.7% in 2007 and 0.3% in the first half of 2008, despite regulations allowing discounts of up to 5%.
Only after the Prime Minister directed stabilization measures in July 2008 did the company reduce prices by 2% compared to imports. Clearly, PV Gas has not fully utilized its ability to reduce prices to stabilize retail prices, even though it was entirely possible.
Although gas is listed under the State’s price stabilization items, enterprises and gas traders are not yet held responsible for retail prices. Major distributors mainly supply gas cylinders to agents, without direct sales to consumers, making retail prices unmanageable.
Because retail prices are uncontrolled, businesses only focus on maintaining their agent network rather than consumer care. This is why consumers are forced to pay high prices and use unsafe gas. Price, market, and tax authorities have also not paid proper attention to this sector, leading to arbitrary price hikes, illegal trading, tax evasion, and smuggling.
Currently, retail gas sales lack a registration mechanism for selling prices, as well as binding regulations from the State or suppliers. This fragmented distribution network, although not yielding high profits at each stage, still results in high consumer prices.
Gas transactions are often conducted by phone, with agents buying and reselling for immediate cash, without maintaining proper accounting records. Agents report selling prices according to recommended rates from gas companies and the press, but actual consumer prices—especially during price hikes—are unclear.
The Ministry of Finance Inspectorate also found that some enterprises purchasing domestically produced gas from PV Gas do not sell directly to consumers but resell to other distributors, causing multiple layers of resale. This practice has pushed gas prices even higher, particularly at Southern Gas Trading Joint Stock Company and Northern Gas Trading Joint Stock Company, which buy 70% of their supply from PV Gas.
(Doanh Nhan 18/12; Nguoi Lao Dong 18/12; Dat Viet 18/ Dau Tu 18/12Tuoi Tre 18/12; Phap Luat Viet Nam18/12; Dai Doan Ket 18/12)
