Petrolimex incurring losses: Auditor

Wednesday, Apr 08, 2015 19:35

Customers fill up motorbikes at a Petrolimex gas station. The national petroleum group suffer a loss last year. -- Photo

HA NOI (Biz Hub) — The Viet Nam National Petroleum Group (Petrolimex) suffered a loss of nearly VND9.10 billion (US$433,000) last year, an audited financial report posted on the company's website revealed.

The result, concluded by auditor Deloitte Vietnam, was different from the VND4.8 billion ($228,000) profit Petrolimex had reported earlier for 2014.

Petrolimex Deputy General Director Tran Ngoc Nam explained in an online statement that the difference was because the company had not established provisional funds for risks posed to inventory price reduction on December 31 last year.

The Petrolimex directorate assessed that this move was suitable at the time, when the declining trend in global crude oil prices had slowed since December.

The directorate also said that the company had accounted for the results in line with the way the Government operates petrol prices.

As per a November 1, 2014 Decree on regulating petrol trading, the base price used by domestic fuel dealers to set their retail prices will be calculated every fortnight.

Meanwhile, Petrolimex was asked to guarantee an adequate petrol volume reserve for about a month. Thus, its selling prices were adjusted later than the time prices of imported commodities fluctuated.

This is why the company did not establish provisional funds on December 31, and recorded business results in practical selling times.

The aforementioned explanations have been identified by Deloitte.

Domestic petrol prices were increased five times and lowered 12 times last year. During 2014, the retail prices were down 26 per cent for gasoline and diesel, 22 per cent for diesel, and 28.2 per cent for mazut.

The Viet Nam Petroleum Association told news website Dan tri that national regulations had not caught up with the practice of petrol price fluctuations. Policies had often been worked out to cope with fuel price hikes, and were not adequate for coping with the extraordinary downward spiral in global oil prices last year.

This had resulted in some disadvantages for petrol dealers in assuring their reserves, the association said, adding that many businesses reported inefficient performance in 2014.

The Deloitte report pointed out that the net turnover from sales of goods and services, which Petrolimex obtained last year was VND206.78 trillion ($9.85 billion), or VND20 billion ($952,000) lower than the previously reported figure.

In 2013, the company earned VND1.58 trillion ($75.24 million) in after-tax profits and VND195.93 trillion ($9.33 billion) in net revenue. — VNS

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