Numerous Vietnamese fuel retailers have been operating at a loss, with some even forced to sell or shut down their businesses. Hopes are pinned on the upcoming revisions to the fuel business decree, which is currently under public consultation.
The director of a fuel station chain in the Central Highlands region revealed that he had leased out several stations and invested in a 20-hectare orchard to cultivate various fruits and coffee. According to him, agriculture has become more profitable than the fuel business in the current economic climate.
This situation is reflective of the challenges faced by many fuel retailers as extremely low profit margins have made the business unappealing. To break even after accounting for costs such as transportation and salaries, fuel retailers require a profit margin of around VND1,000 (US$0.04) per liter. However, with current margins fluctuating between VND500-700 ($0.02-0.03) per liter, businesses have been forced to operate at a loss.
Additionally, temperature differences during transportation lead to significant fuel losses. A fuel retailer in Son La Province analyzed that temperatures in Region 1 typically range from 30-36°C. When fuel is transported over 430 km to Region 2, where temperatures drop to 29-30°C, significant fuel loss occurs. It is estimated that a 1°C decrease in temperature results in a loss of approximately 13 liters of fuel per 10 cubic meters. With larger quantities, losses increase further, not to mention additional losses during the transfer of fuel to lower-temperature storage tanks.
Full story at Vietnamese fuel retailers face profit squeeze, call for policy changes | SGGP English Edition
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