Petrolimex attributes loss to pricing policy

Petrolimex, Vietnam’s largest fuel wholesaler, posted a loss of VND2.3 trillion (US$110.4 million) from its fuel business in 2011. Tran Ngoc Nam, Deputy CEO, said that the loss was principally due to the country’s price stabilization policy. Petrolimex has been operating with profits over the last few years in every sector except the fuel business, he added.
In its report on the 2011 financial status of Petrolimex, the State Audit of Vietnam said that the combined pre-tax loss of more than VND1.4 trillion (US$67.2 million) last year is net of the VND2.3 trillion (US$144.1 million) loss from the fuel sector, part of which was offset by profits from its other businesses. The audit showed that the reported loss of VND189 (US$0.009) per liter of gasoline is due to the inadequate management by the company of its fuel loss rate. It pointed out that Petrolimex calculates expenses from the fuel shipment’s point of origin until the time of purchase by end-consumers, which equates to higher losses. Other fuel wholesalers, on the other hand, calculate expense starting from the point of origin to its arrival at Vietnam ports. Nam said that Petrolimex sells fuel in all but one of 63 cities and provinces in Vietnam, extending to very remote areas, which requires higher transport cost. (November 23, 2012)