The company is a joint venture between Japan’s Idemitsu Kosan and Kuwait’s KPI. Experts expect the move will increase competitiveness.
Petrolimex currently holds a 47.8% share of the retail market. Along with PV Oil and Saigon Petro, the three companies account for over 75% of the country’s total market.
"There isn’t real competition in Vietnam’s current petrol market. That’s why the government has to set a price ceiling as a base to determine the market retail price." - Ngo Tri Long, Economic Expert.
With such a market, the involvement of a foreign investor is a much-needed push that will help the country’s market move closer to international standards.
"I think Decree 83 has problems regarding the methods to determine the base price, effects of FTAs on taxation as well as collecting state budget revenue from petrol sales. When foreign investors are involved, in both wholesale and retail, Decree 83 will have to be adjusted according to international rules." - Vu Dinh Anh, Economic Expert.
Idemitsu is currently the second largest foreign joint venture company in the Japanese petrol market, while Kuwaiti owned KPI exports over 450,000 barrels of petrol a day. The participation of these international investors will increase the domestic market’s competitiveness and benefit Vietnamese customers.
"Certainly many other businesses will follow these companies. Consumers will benefit the most. The government will have more tax revenue and companies can also share experience." - Ngo Tri Long, Economic Expert.
The joint venture has received its investment certificate and other business registration procedures are now underway
