Making news

Careful consideration must be given to extending foreign ownership at petrol firms

Deputy Prime Minister Le Van Thanh has asked the Ministry of Industry and Trade to give careful consideration to the proposal of extending the amount of foreign ownership at petrol and oil business to 35 percent.

In the draft decree to amend to the Decree No 83/2014 concerning the petrol industry, the Ministry of Industry and Trade proposed the room for foreign ownership to be extended to 35 percent, which would enable foreign investors to participate more in the domestic retail petrol market.

Thanh stressed that petrol and oil were strategic but sensitive products and could have large impacts on the national energy security.

He asked the ministry to consider a number of aspects with comprehensive and objective analysis about opening more doors for foreign investors in the petrol and oil retail business.

Gains and losses in the short and long terms must be evaluated before a decision is made, Thanh stressed.

But the proposal has triggered some concerns.

Under the current regulations, enterprises with foreign investment were not allowed to import, export and distribute petrol and oil. This was to ensure that foreign investors would not have control over the petrol and oil market and affect the national energy security.

Idemitsu Q8 was the only foreign investor licensed to operate a petrol retail business in Vietnam. Foreign ownerships at petrol distributors Petrolimex and PVOil were now respectively 20 percent and 35 percent. However, foreign investors at these businesses must be approved and licensed by competent authorities to participate in the petrol retail market as special cases.

The Ministry of Industry and Trade said that opening more doors for foreign investors to participate in the petrol retail market would help promote the market's development.

Capping foreign ownership at 35 percent would help to maintain the dominant role of domestic enterprises while domestic firms would receive capital, technology and management strategy from foreign investors, the ministry said./.