Industry and trade ministry shows loose gasoline management: Gov’t Inspectorate

The Ministry of Industry and Trade’s insufficient inspections and loose management have resulted in the appropriation of the petrol price stabilization fund and violations in gasoline business licensing, announced the Government Inspectorate on Thursday.

In its inspection conclusion on violations by the Ministry of Industry and Trade (MoIT) and a number of key enterprises engaged in fuel trading, inspectors said, to be licensed as a gasoline trader, as per the government’s Decree 83/2014, a business must have warehouses and tanks or rent them from another unit for at least five years. This has led to distributors renting warehouses seasonally to obtain licenses.

In more than five years, the MoIT issued 37 petrol import-export licenses for wholesalers (excluding four aircraft fuel business licenses) and 347 trading licenses for retailers.

However, after being licensed, many wholesalers failed to meet requirements regarding petrol distribution systems, warehouses and tanks, affecting the market supply.

"The Ministry of Industry and Trade showed a lack of inspection and supervision, and loose management, as well as failed to promptly detect violations related to warehouses, tanks and distribution systems," the inspection conclusion stated.

Due to the ministry’s loose management, for nearly five years (from 2017 to September 2022), some distributors illegally sold about 828,963 cubic meters of gasoline to wholesalers to enjoy discounts and price differences, inspectors said, adding wholesalers did not source fules according to regulations, affecting the market supply.

“This was the cause of supply disruptions in 2022,” the Government Inspectorate said.

In addition to licensing violations, the management and use of the petrol price stabilization fund also revealed many shortcomings, leading it to be appropriated by businesses.

According to the inspection conclusion, for more than five years, the MoIT and the Ministry of Finance decided to spend nearly VND1,143 billion ($46.9 million) from the fund when fuel prices had not increased. They also paid over VND318 billion ($13 million) higher than price increases.

From January 1, 2017 to April 23, 2018, the two ministries’ unclear price management documents enabled 19 wholesale traders to appropriate more than VND1,013 billion ($41.58 million) from the fund, of which VND680 billion was used improperly.

According to regulations, the price stabilization fund should only be used in urgent cases, such as unusual price hikes that affect people's lives, but in reality, the two ministries used it continuously over a long period of time, even when there were no price fluctuations.

With these violations, the Government Inspectorate proposed the Prime Minister take disciplinary measures against relevant organizations and individuals at the Ministries of Industry and Trade and Finance for management violations that led to gasoline shortages, as well as for their lax management and supervision of the price stabilization fund.

The inspection agency also transferred to the investigative agency under the Ministry of Public Security documents related to violations in using the petrol price stabilization fund and in declaring and paying environmental protection taxes at Thien Minh Duc Group JSC, Xuyen Viet Oil Travel and Transport Trading Company Limited and Hai Ha Waterway Transport Company Limited for handling in line with the law.