A petrol station owned by Petrolimex

As a business holding the largest market share in the domestic market petroleum, the Vietnam National Petroleum Corporation (Petrolimex) has always played a key role in stabilising the market over the past years.

Petrolimex, formerly the Oil and Grease Corp. that was founded under Decree No. 09/BTN issued by the Ministry of Commerce on January 12, 1956, was re-established under Decision No. 224/TTg signed by the Prime Minister on April 17, 1995. At present, Petrolimex has 43 member companies, including an one-member limited liability company in Singapore; 37 branches, enterprises and warehouses directly run by its wholly State-owned member companies; 23 joint stock businesses in which Petrolimex holds a dominating stake; and three joint ventures with foreign partners.

Petrolimex has met nearly 60 percent of the domestic petroleum demand through its system of modern storages and ports, more than 1,900 retail stations and some 5,500 agents nationwide. In addition, the corporation has boosted the re-export and border gate-to-border gate transport of petroleum products to Laos and Cambodia as well as expanded its market to China, Hong Kong and the Philippines.

In the 2006-2009 period, in the context of complicated world economic developments, the world oil market saw continuous fluctuations with unusual increases and drops. Since the end of 2007, the price of crude oil had continuously climbed with a peak of 147 USD per barrel and then dropped to 40 USD per barrel. By early January 2010, the oil price fluctuated around 80 USD per barrel, greatly affecting supply-demand as well as oil and petrol prices in the country.

In further application of the mechanism, the government has gradually removed the subsidy mechanism on the oil and petrol products. Since Decree No. 84/2009/ND-CP on oil and petrol trading in the Vietnamese territory took effect on December 15, 2009, businesses were allowed to decide their selling prices and take direct responsibility for their business activities.

Inheriting the tradition and patriotic emulation movement as well as defining the important role of emulation and commendation work in the new situation, the party committees, boards of directors and directorates of Petrolimex and its affiliates have always paid attention to guiding, managing and renovating the emulation and commendation work in the whole sector. They define it as an important task, a momentum for development and a measure to build new collectives and labourers.

The emulation and commendation work is directly steered by the management authorities with the consultative role of the emulation board and the coordination of mass organisations.

In the 2006-2009 period, the emulation movement in the entire corporation saw a strong improvement in quality. Emulation movements were associated with implementing production and business development tasks and objectives in each period, creating a strong momentum for units and individuals to promote their patriotism and strive to overcome difficulties and challenges to fulfill their entrusted tasks, thus helping build Petrolimex into a major business representing the key role of State-owned enterprises in petroleum trading activities.

The whole corporation has launched many emulation movements focusing on the sector’s particular activities. The movements have been implemented in various forms that are suitable to each unit’s conditions and operations. Together with the goals for emulation, Petrolimex has built a system of criteria and scores to assess the emulation results of each group of units. Emulation movements launched by Petrolimex have become part of the workers’ life, steering them towards safety, productivity, quality and effectiveness, thus turning into a fine tradition of labourers and a great source of internal strength for production development.

The results of emulation movements have helped Petrolimex ensure supplies and better serve people’s consumption demands, contributing to stabilising the socio-economic situation and strengthening national energy security. Petrolimex twice received the Prime Minister’s certificate of merit for its achievements in stabilising the market prices in late 2007 and the first six months of 2008.

Outstanding workers at Petrolimex conference honouring model workers

Petrolimex units have made effective use of the “Productivity-Quality-Effectiveness” movement to modernise their technical infrastructure (the total investment increased from 598 billion VND in 2006 to 800 billion VND in 2009). Major investment projects have been put under thorough control to ensure progress and quality, timely bringing into use hundreds of thousands of cu.m of storages and hundreds of petroleum stations, thus helping raise the sector’s business capacity. Many member units have showed their good performance in the movement, including Petroleum Import-Export Company Zone 2 and the B12 Petrol Company. Especially, the Nha Be General Storage under Petrolimex Zone 2 has emerged as an outstanding example in modernising infrastructure, ensuring supplies for the southern market.

In addition, the general storage has also arranged its labourforce scientifically, cut costs and excellently fulfillrg its tasks. With these achievements, it is being nominated for the “Labour Hero in the Renewal Process” title by the emulation boards at all levels. Campaign on “Applying the ISO 9001-2000 Quality Management System” and seeking initiatives to improve technologies have received active responses from the member units.

Since 2006, Petrolimex has had more than 700 initiatives on streamlining the production and business process, bringing about benefits worth up to tens of billions of VND to businesses. Many of them have been applied widely in the whole corporation. Contests entitled “Good Store Manager”, “Model Station” and “Good Salesman/ Woman” have been launched in the whole sector.

Many units such as the Ha Giang and Ha Son Binh Petroleum Companies, the Petroleum Retail Sale Enterprise and the Petroleum Import-Export Company Zone 2 have combined the emulation campaigns with their production and business tasks, thus building a communication culture among workers as well as between workers and customers. Movements to build safe, united, stable and developed units and implement grass-root democracy regulations have also receive due attention.

The quality of staff congresses and labourers’ conferences in joint stock companies has been improved. Labourers’ legitimate proposals have been accepted their management. Campaigns such as protecting the environment and ensuring labour hygiene and safety, national week on safety and fire fighting, “Good at State jobs, good at housework” as well as movements to popularise sports and cultural activities have received warm response, helping boost production and business activities as well as improve the spiritual life of staff in the entire corporation.

Social activity has been a fine tradition of the petrol sector for many years. Petrolimex has mobilised its staff to actively participate in social and charity movements such as supporting victims of natural disasters and poor people, visiting and presenting gifts to war invalids on the occasion of the War Invalids and Martyrs’ Day on July 27.

In addition to the response of its units based in localities, Petrolimex has contributed to central and local funds and the industry and trade sector’s funds, including the “Vietnam Children’s Fund”, “Fund for AO/dioxin Victims” and “Vu A Dinh Scholarship Fund”, with a total donation of up to 300 billion VND. Since 2009, Petrolimex has implemented a programme in support for poor Dong Van district in t Ha Giang province under the spirit of Resolution No. 30a/2008/NQ-CP issued by the Government on December 27, 2008.

The programme, which lasts for many years, aims to help the district reduce poverty and improve the material and spiritual life for local ethnic minority people. In 2009 alone, Petrolimex earmarked 7.4 billion VND to eliminate 1,054 temporary houses, present scholarships for poor students and support disabled children in the district.

In 2010, Petrolimex plans to continue the programme through replacing remaining temporary houses and providing health care, education and vocational training for local people with an estimated investment of over 11.5 billion VND.

Emulation movements that Petrolimex launched during the period 2006-2009 motivated the corporation’s staff to complete their job, even passing political targets set for the corporation. Petrolimex combined emulation and promotions campaigns with carrying out political tasks. Annually, it over fulfilled its production target for domestic sales set by the Ministry of Industry and Trade from 3%-5% and fulfilled its role in stabilising the petrol and oil market and ensuring the security of the nation’s power supplies.

The corporation contributed 77 trillion VND to the State budget from 2006 to 2009 and its rate of profit over its chartered capital reached an average of 25 percent.

Petrolimex’s joint stock companies have increased their after-tax profits and many of them lead the industry such as the Petrolimex Petrochemical Joint Stock Company, the Petrolimex Joint Stock Insurance Company (PJICO) and the Petrolimex Gas Joint Stock Company. The corporation’s joint venture companies have also recorded positive results.

With the remarkable achievements Petrolimex has recorded during the global economic crisis, the corporation’s trademark now lies second out of the top 500 enterprises in Vietnam, only after the Vietnam National Oil and Gas Group (PetroVietnam). It was awarded the Ho Chi Minh Order by the Party and State in recognition the corporation’s 50 years of development.

According to General Director of Petrolimex Bui Ngoc Bao, the corporation has put together a wide range of programmes to cope with changes in the global petroleum market, including movements to encourage patriotic emulation, solidarity and strength, and has stepped up the implementation of political tasks as well as ensured petrol for the domestic market.

Although facing difficult circumstances, Petrolimex focused on modernising its infrastructure to meet the standards of an international petroleum group. The corporation invested nearly 2,500 billion VND in building and upgrading its facilities and over 1,900 distributors are now equipped with modern technology. Currently, to improve its transportation capacity, the corporation is commissioning a large and modern fleet of tankers, with 10 ships worth 370 million USD. Petrolimex is carrying out projects to build up storage facilities, a plant to produce lubricating oils and five warehouses and factories in Ho Chi Minh City, Hai Phong, Hanoi, Da Nang and Can Tho that can bottle gas, using modern technology.

All the corporation’s efforts aim to increase its petrol reserves and stabilise the Vietnamese petrol market during an uncertain period in the world and changes that have affected domestic petrol supplies.

As one of the country’s leading companies that holds a large portion of the market share, Petrolimex proposed that the government changes the business mechanisms for petrol and works with state management agencies. Petrolimex exceeded its financial target for the first time in 2009, contributing 28,800 billion VND to the state budget. This is seen as an evidence that the new mechanism has been a success.

2010 marks a turning point for the corporation as the government has agreed to equitise the whole corporation, modelling it on a multi-functional fuel based group. The cooperation’s tasks in the future will require its employees to make more effort to change their way of working and build on the achievements of the past 55 years.

Thanh Huong