Hoang Tho Xuan, Director of the Domestic Market Department (Ministry of Industry and Trade), said that the new conditions for LPG business are intended to establish a stable market, not to narrow the participants.
“Decree 107/2009/ND-CP aims to create a healthy LPG business environment, not because the regulators saw too many wholesalers and thus imposed conditions to reduce the number for easier management. This decree helps stabilize the market and protect consumers’ rights,” Mr. Xuan affirmed at the Conference introducing Decree 107/2009/ND-CP recently held in Ha Noi.
For example, according to the Ministry of Industry and Trade, the regulation requiring LPG wholesalers to issue retail prices within their distribution system and be responsible for maintaining these prices to end consumers is precisely to protect consumers’ rights. This provision binds wholesalers to their products, limiting the recent price pushing practices.
Similarly, the condition that LPG import-export enterprises must have 300,000 gas cylinders is also to ensure stability in supplying this product to the market and to prevent unauthorized use of cylinders among companies. Regulations on LPG filling stations and dealer standards are also intended to address disorder in the LPG market.
Many enterprises are concerned that licensing for this product will become more difficult after September 30, 2010 (the deadline for non-compliant businesses to cease operation under Decree 107/2009/ND-CP), since the time left is too short for regulators to issue detailed provisions.
“Businesses fear they will not meet the business standards, especially the requirement for a certificate of training in LPG trading, and will have to withdraw from the market. If local authorities do not issue licenses, the LPG market could be seriously affected,” said Nguyen Thi Nhu Mai, Deputy Director of the Ha Noi Department of Industry and Trade.
However, Hoang Tho Xuan confirmed that the Ministry of Industry and Trade will quickly complete guiding circulars and coordinate with other ministries and agencies to provide training in relevant business operations. With active engagement from regulators, enterprises should not worry about meeting the required standards.
Regarding concerns from LPG businesses that the decree might be erecting barriers to limit their rights, Nguyen Si Thang, Chairman of the Vietnam Gas Association, asserted: “Decree 107/2009/ND-CP only increases the mandatory conditions for LPG traders, it does not restrict their rights.”
The key requirement for businesses is to carefully study the business conditions stipulated in Decree 107/2009/ND-CP to meet minimum standards and add any missing requirements to avoid being excluded from the market.
The Ministry of Industry and Trade admitted that LPG trading is much more complicated than petroleum products. Therefore, the transitional period from January 15 to September 30, 2010 is designed to give businesses time to fulfill the conditions required by Decree 107/2009/ND-CP.
According to the Ministry, in the first quarter of 2010, the circular guiding implementation of Decree 107/2009/ND-CP will be issued to provide local authorities and businesses with a clear legal basis.
One notable point of this decree is that the Ministry of Industry and Trade will only make planning for large warehouses and ports in the LPG business system. The main responsibility for managing LPG trade will lie with local authorities.
Given the current conditions, if local authorities do not soon issue business plans for LPG in their areas, enterprises will face greater difficulties in complying with Decree 107/2009/ND-CP.
(Dau Tu 20/1)
