Three years have elapsed since the time that IQ8, a joint venture between Japan’s Idemitsu Kosan Group and Kuwait Petroleum International Ltd (KPI), officially opened its first distribution station in Vietnam, becoming the first foreign petroleum retailer in the market.

Foreign investors set up a petroleum retail company in Vietnam in a special case thanks to the government’s commitment given to the investors of the Nghi Son Oil Petrochemistry and Oil Refinery project in Thanh Hoa.

To date, it remains the only foreign retailer in Vietnam and the market is still under the government’s control.

Foreign investors set up a petroleum retail company in Vietnam in a special case thanks to the government’s commitment given to the investors of the Nghi Son Oil Petrochemistry and Oil Refinery project in Thanh Hoa.

MOIT’s plan to open the petroleum retail market to foreigners has caught special attention from the public.

The ministry, drafting the decree to amend articles of Decree 83 on petroleum trade, is considering allowing all businesspeople trading petroleum products to transfer no more than 35 percent of shares to foreign investors.

The draft decree, if approved, is expected to create a more competitive petroleum retail market.

Asked why MOIT considers opening the petroleum retail market to foreign investors, a senior official said it is necessary to consider the time for opening very carefully.

In 2007, when it joined WTO, Vietnam did not commit to open the petroleum market.

After 13 years of joining WTO, Vietnam’s economy has deeply integrated into the world economy and has signed a lot of FTAs with large economies. It has allowed foreign businesses to invest in many important business fields, including power, oil and gas, banking and aviation.

As for the petroleum distribution, after a period of protection, Vietnamese enterprises have organized large distribution networks and have entered a new development period.

They need to build specialized storehouses and wharves and make investment in production, a field that needs huge investment capital.

Some key state-owned enterprises in the field have been equitized and have received the nod from the Prime Minister to sell shares to foreign investors with specific ratios.

Petrolimex, for example, can transfer 20 percent of shares to foreign investors, PVOIl 35 percent and Binh Son Petrochemistry and Oil Refinery 49 percent.

Nguyen Thanh Son, former director of Song Hong Energy JSC, said MOET’s intention to allow foreign investors to join the market shows a ‘more open mindset’ in market management.

However, he thinks that it would be better not only to open the petroleum retail market, but also allow foreign businesses to invest in all links of the distribution chains, from import to wholesale and retail.

Mai Lan 

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