Petrolimex applies solutions to cope with big fluctuations in petrol prices

The Vietnam National Petroleum Group (Petrolimex) is adopting a range of solutions in order to complete production and business targets of the third quarter and the entire year of 2022 in the context of unforeseeable fluctuations in petrol prices.

One of the solutions is to modernise inventory management while engaging in negotiations with major petrol distributors to ensure supply to meet social demand for petrol.

At the same time, the group has taken steps to cut costs in all production and business activities through several projects on centralized fleet management, asset management and customer relationship management.

Petrolimex has also worked to increase non-cash payment in retail sales and researched the possibility of building truck stops to provide better services for customers.  

Under its own plan on digital transformation, the immediate focus is to automate the network of petrol warehouse and retail outlets, and roll out a national plan on selling petrol via the Petrolimex mobile application. Petrolimex has installed contactless POS terminals at retail petrol stations throughout Vietnam, enabling customers to pay with a single tap via their Visa cards.

The newly deployed POS device meets all fire safety regulations, integrates with the pump, and connects wirelessly to serve customers paying right there.

In addition, the group is finalising a scheme on restructuring and divesting capital from fields in which it has been operating at a loss.

Regarding investment projects, Petrolimex is accelerating the construction of the Petrolimex building, the upgrade of its network of warehouse, ports and pipelines, and investing in equipment and technology.  

According to the group’s financial report released on July 30, its net revenue in the first six months of 2022 reached 151.387 trillion VND (6.47 billion USD at current exchange rate), an increase of 78% from the same period last year. The increase was mainly attributed to the rise in world prices of crude oil, with the average price in the period surging 31% year-on-year to 101.7 USD per barrel compared to 77.2 USD in the first half of 2021.

Pre-tax profit was 293 billion VND, equivalent to only 10% of the target and 10% of the figure of the same period last year. Despite a 9% increase in the volume of petrol sale, petrol business of the group posted a loss of 595 billion VND.

Meanwhile, non-petrol business brought pre-tax profit of 888 billion VND, of which petrol chemical, asphalt and chemical business earned the highest profit with 369 billion VND. Insurance-banking posted pretax profit of 138 billion VND, warehouse 112 billion VND, aviation fuel 91 billion VND, gas 79 billion VND, transport 43 billion VND and other business 56 billion VND.

In the first half of this year, Petrolimex paid 21.393 billion VND to the State coffer, up 9 percent from the same period in 2021.

In the context of surging petrol prices due to the negative impacts from the Russia-Ukraine conflict in the second quarter, Petrolimex had to import petrol to meet domestic demand for social-economic development, which had resulted in a remarkable reduction in profit from petrol business.  

The group, holding more than 50% of the domestic petrol retail market share, explained that the conflict between Russia-Ukraine raised concerns about energy supplies, pushing US West Texas Intermediate (WTI) crude higher, from 75.88 USD a barrel to 102.07 USD after the first three months of the year.

However, during the period, Nghi Son Refinery and Petrochemical LLC reduced oil output, while some technical issues also forced it to halt production sometimes.

Therefore, the company had to change its importing plan, seeking supplies with higher prices, Petrolimex said./.