HCMC gas stations stop selling, wait for price hike

Many gas stations in the southern economic hub of Ho Chi Minh City are suspending operations as they are expecting a price hike to be realized soon.

A "out of stock" sign is showed at a gas station located on Nguyen Kiem Street in Go Vap District.

As of 5:30 pm on August 11, 2012, a "power outage" sign was still hung at a gas station under Military Petrochemical Joint Stock Co (MIPEC) located on Nguyen Oanh Street in Go Vap District.

According to some local residents there, the station has stopped selling for two days, stating that it is running out of fuel.

An employee at a nearby mobile phone shop said there was a fuel tank truck dropped by the station to feed it in the morning. After the trucked left, the station resumes operation for a while, but it stopped again after filling some taxis.

Around 3:00 pm on the same day, a gas station under Southern International Petroleum Co on Nguyen Kiem Street in Go Vap District also suspended from operation.

However, after being taken pictures by Tuoi Tre, it resumed operation.

According to some people in the area, the station stopped selling from Friday afternoon.

These are not isolated cases, as a series of gas stations in HCMC, especially in suburban areas like those in district 9, Thu Duc, Binh Tan, and Binh Chanh, also simultaneously stopped selling starting Saturday, announcing publicly that they had run out of stock.

On Friday, many petroleum wholesalers sent their new price registration to the Ministry of Finance, with the newly registered price increasing by VND1,200-1,400 per liter and VND600-700 per liter for A92 per A95 gasoline and for diesel respectively.

Many of them said the world oil price has risen sharply in recent times, but they have to wait until Friday to submit the price hike plan in accordance with a regulation.

The minimum interval between two successive price increases is ten days, according to Decree No.84 on petroleum product pricing mechanism.

The director of a business said the A92 gasoline price in the reference market of Singapore on Thursday surged to $127.63 per barrel, making the price of imported A92 increased $11.49 per barrel, 9.9 percent hike compared to that in the last domestic oil price increase on August 1, 2012.

However, business insiders said maximum price difference between the local and international A92 is about VND1,100 per liter. The VND1,400 price hike plan may depend on the differences in import sources.

Still predictable?

Saigon Securities Inc (SSI) and Ho Chi Minh Securities Co have predicted that the retail petroleum prices may be increased soon.

SSI said A92 gasoline world price has increased to $120.6 per barrel, up 20.6 percent compared with the price on July 7, 2012 in the August 06 trading session.

“If we calculate the average price within 30 days, petroleum enterprises can maintain break even or slight loss. However, they may lose about VND1,300 per liter if calculating it in 10 days.”

“Thus, the researching department of SSI confirmed that in the next 10 days, petroleum price may be adjusted upwards one more time.”

The Ministry of Finance said that domestic petroleum price would continue to be raised if world petroleum price increase.

In addition, it is unlikely that the ministry will reduce petroleum import tax as this may affect the state budget revenues, but it can consider adjusting contribution amount for the price stabilization fund, SSI said.

SSI also said that the petroleum price increase will not affect much CPI in 2012. However, it will cause pressure on growth expectation for this year and weaken domestic purchasing power.

HSC has also given the same forecast, stating that in accordance with the Decree No.84, local petroleum wholesalers are suffering a current loss of VND430-630 per every liter of petroleum products sold.

The loss rates may surge to VND600-1,200 per every liter of petroleum products sold if the average base price is compared with that in 10 days earlier.

Therefore, HSC said that it is quite likely that local fuel prices will increase in the next 10 days.