Decision No. 1505/2003/QD-BTM On the Issuance of the Agency Business Regulations for Petroleum Products

DECISION OF THE MINISTER OF TRADE

On the issuance of the Agency Regulations for Gasoline and Oil Trading

_______________________

THE MINISTER OF TRADE

Pursuant to Decree No. 95/CP dated December 4, 1993 of the Government stipulating the functions, tasks, authorities, and organizational structure of the Ministry of Trade;

Pursuant to the Commercial Law promulgated on May 23, 1997 (Section 6 Chapter II on Agency Purchase and Sale of Goods);

Pursuant to Decision No. 187/2003/QD-TTg dated September 15, 2003 of the Prime Minister on the issuance of the Management Regulations for Gasoline and Oil Trading;

To build a stable system of gasoline and oil agencies that gradually aligns with the market mechanism under state management, meeting economic development needs and social consumption demands;

Considering the proposal of the Director of the Domestic Trade Policy Department;

DECISION:

Article 1. This Decision hereby promulgates the Agency Regulations for Gasoline and Oil Trading.

Article 2. This Decision takes effect from January 1, 2004.

Article 3. All previous regulations on gasoline and oil trading that conflict with the provisions of the Agency Regulations issued together with this Decision are hereby abolished.

Article 4. The Chairmen of the People's Committees of provinces and centrally governed cities, Directors of Commerce Departments; Heads of the Office of the Ministry of Trade, Directors of the Domestic Trade Policy Department, and Heads of relevant Departments and Bureaus of the Ministry of Trade shall be responsible for implementing this Decision.

REGULATIONS ON GASOLINE AND OIL AGENCIES

(Issued together with Decision No. 1505/2003/QĐ-BTM dated November 17, 2003 of the Minister of Trade)

PART I
General Provisions

Article 1. Scope of application and regulated subjects

1. Gasoline and oil referred to in these Regulations include motor gasoline, diesel fuel, kerosene, and mazut (including gasoline and oil produced or processed from imported materials or domestic materials).

2. These Regulations govern gasoline and oil agencies and apply to enterprises engaged in gasoline and oil trading on the domestic market from wholesale to retail sales to consumers.

Article 2. Definitions

Some terms in these Regulations are understood as follows:

1. A primary gasoline and oil enterprise is an enterprise engaged in importing gasoline and oil (including both imports and production and processing of gasoline and oil from domestic or imported raw materials) that meets all conditions stipulated in Article 5 of the Management Regulations for Gasoline and Oil Trading issued together with Decision No. 187/2003/QD-TTg dated September 15, 2003 of the Prime Minister.

2. The agency entrusting party is a primary gasoline and oil enterprise or its affiliated units representing the primary gasoline and oil enterprise (company, branch, factory, warehouse) that transfers gasoline and oil to the agency for sale.

3. The agency is an enterprise that receives gasoline and oil from the agency entrusting party for sale and earns commission.

4. Commission agency is a form of agency where the agency sells gasoline and oil at the selling price set by the agency entrusting party and earns a commission agreed upon by both parties.

5. Exclusive agency is a form of agency where the agency undertakes to sell a certain quantity of gasoline and oil at the selling price set by the agency entrusting party. The commission earned by the agency is the difference between the actual selling price and the price set by the agency entrusting party.

6. General agency is a form of agency where the agency of a primary gasoline and oil enterprise organizes a system of retail agencies under its control, including its own stores and retail agencies. Retail agencies perform their rights and obligations directly with the general agency, while also performing their rights and obligations through the general agency towards the primary gasoline and oil enterprise.

When receiving gasoline and oil from a primary gasoline and oil enterprise, the general agency is the agency; when transferring gasoline and oil to retail agencies, the general agency is the agency entrusting party.

Article 3. Provisions on agencies

1. Primary gasoline and oil enterprises must establish an agency system for gasoline and oil trading according to these Regulations when selling gasoline and oil on the domestic market, in addition to direct sales to industrial households and retail sales to consumers; they can only sell gasoline and oil through agencies to enterprises within the agency system and jointly bear responsibility for prices, quantities, and quality of gasoline and oil up to the retail stage.

2. Enterprises of various economic components that meet the conditions for gasoline and oil trading stipulated in Circular No. 14/1999/TT-BTM dated July 7, 1999 of the Ministry of Trade may engage in wholesale and retail gasoline and oil trading on the domestic market through agencies according to these Regulations and are responsible for prices, quantities, and quality of gasoline and oil sold in accordance with commitments in the agency contracts.

3. Any retail outlets not part of the distribution system of a primary gasoline and oil enterprise or the distribution system established by a general agency of a primary gasoline and oil enterprise are prohibited from engaging in gasoline and oil trading on the market.

4. Gasoline and oil trading enterprises, including retail agencies, must maintain accounting records and documents in all stages of gasoline and oil circulation according to the regulations of the Ministry of Finance.

5. It is strictly forbidden to engage in speculative hoarding, monopolistic collusion that disrupts the market; selling gasoline and oil at prices other than the listed price, selling less than the required quantity, or failing to meet the specified quality standards for each type of gasoline and oil, and other fraudulent acts against customers.

Chapter II
Organization of the gasoline and oil agency system

Article 4. Gasoline and oil agency system

1. The gasoline and oil agency system is a component of the distribution system of a primary gasoline and oil enterprise. The distribution system of a primary gasoline and oil enterprise includes: units directly under the enterprise (companies, branches, factories, warehouses) that sell gasoline and oil directly to industrial households and supply gasoline and oil to agencies; retail stores and stations directly under the enterprise or under the aforementioned units; the agency system includes general agencies and retail agencies selling gasoline and oil to consumers.

2. The gasoline and oil agency system of a primary gasoline and oil enterprise is organized mainly through the following channels:

2.1. A primary gasoline and oil enterprise establishes a system of retail agencies and directly enters into contracts to transfer gasoline and oil with each retail agency for them to sell to consumers.

2.2. A primary gasoline and oil enterprise enters into contracts to transfer gasoline and oil to general agencies, which then sell gasoline and oil directly to industrial users and enter into contracts to transfer gasoline and oil to retail agencies.

Petroleum enterprises may choose one or combine the above channels as appropriate to their market conditions and business circumstances.

3. A general agent may enter into contracts with multiple petroleum enterprise wholesalers, but must establish a separate retail agency system for each wholesaler. At a single retail outlet, only petroleum products from one petroleum enterprise wholesaler may be sold, and the sign of that petroleum enterprise wholesaler must be displayed according to Point 3.3 Clause 3 Article 5 of this Regulation and clearly stated in the agency contract. A petroleum enterprise wholesaler has the right to refuse a general agent's contract with multiple petroleum enterprise wholesalers and to decline signing a contract with such a general agent.

Article 5. Responsibilities of enterprises within the agency system

1. Responsibilities of petroleum enterprise wholesalers:

1.1. Organize the importation of petroleum products in accordance with the quantity and structure of types within the minimum import quota assigned, ensuring quality as prescribed and supplying sufficient and stable petroleum products to its distribution system to meet the demand on its trading territory; maintaining a reserve stock equivalent to 15 days' supply based on the minimum import quota assigned, both in quantity and structure of types.

1.2. Establish the petroleum distribution system of the enterprise in accordance with Article 4 of this Regulation at provinces and cities suitable to its business capacity; only allocate petroleum products to agencies within its system for sale under agency agreements.

Register this petroleum distribution system with the Ministry of Commerce before January 15, 2004, using the form attached to this Regulation, and supplement the registration monthly if there are changes. Notify the provincial or city Department of Commerce of the list of subordinate units, general agents, and retail agencies operating within its distribution system on the trading territory so that the Department of Commerce can monitor them.

1.3. Set and publicly announce the retail price of petroleum products; organize inspections and jointly bear responsibility for the implementation of the retail price within its distribution system.

Send a document deciding the retail price of petroleum products (including sudden price changes) to the provincial or city Department of Commerce where its subordinate units, general agents, and retail agencies operate so that the Department of Commerce can have a basis for monitoring the retail prices of these agencies.

1.4. Clearly state in the agency contract the responsibilities of the parties regarding the quality of petroleum products; stipulate inspection procedures and organize inspections of the quality of petroleum products and calibration of measuring equipment of retail agencies, and jointly bear responsibility for the quantity and quality of petroleum products sold within its agency system.

1.5. Fulfill all commitments signed in the agency contract; ensure the legality of the source of petroleum products supplied to agencies; provide brand symbols (logos) and guide retail agencies to hang symbols and display signs in accordance with this Regulation; provide invoices and related documents and pay commissions to agencies as agreed and committed in the contract.

1.6. Cooperate with central and local functional agencies to manage general agents and retail agencies engaged in petroleum trade in accordance with legal regulations, ensuring market stability and prices; develop plans for expanding its distribution network and technical facilities for petroleum trade in regions, areas, and cities to meet market development needs.

2. Responsibilities of general agents:

2.1. Select and enter into contracts to act as general agents selling petroleum products for petroleum enterprise wholesalers.

2.2. Establish its own petroleum distribution system, including warehouses, stores, retail stations, and retail agencies as prescribed in Article 4 of this Regulation, and register this system with petroleum enterprise wholesalers when entering into general agent contracts; bear legal responsibility and responsibility to petroleum enterprise wholesalers for the operation of the petroleum distribution system it organizes and manages.

2.3. Only sell petroleum products directly to industrial households under contracts, supply petroleum products to subordinate units for retail or to retail agencies within its system under agency contracts.

2.4. Based on contracts signed with petroleum enterprise wholesalers, ensure regular and stable supply of petroleum products to retail agencies within its distribution system to meet market demand. It shall not accept petroleum products from untraceable sources or outside the system for sale at its subordinate units and transfer to retail agencies.

2.5. Bear responsibility for the quantity and quality of petroleum products received from petroleum wholesalers according to signed contracts. Clearly state in contracts with retail agencies the responsibilities of the parties regarding the quality of petroleum products; stipulate inspection procedures and organize inspections of the quality of petroleum products and calibration of measuring equipment of retail agencies, and jointly bear responsibility for the quality and quantity of petroleum products sold by retail agencies.

2.6. Regularly inform petroleum enterprise wholesalers about market conditions; cooperate with petroleum enterprise wholesalers to continuously increase sales volume to stabilize the market and meet consumption demands at all times.

2.7. Implement regulations on fire prevention and explosion safety, environmental hygiene, and other laws governing petroleum trade.

3. Responsibilities of retail agencies:

3.1. Can only act as a retail agency for one enterprise (a petroleum enterprise wholesaler or an enterprise acting as a general agent) and can only sell petroleum products from one petroleum enterprise wholesaler according to signed agency contracts.

3.2. Continuously sell petroleum products to the market and shall not sell at a higher price than the retail price set by the petroleum enterprise wholesaler.

3.3. The sign at the place of sale must clearly state "Retail Agent for Petroleum Products" and the name of the petroleum enterprise; it must display or hang the emblem (logo) of the petroleum enterprise and may only record the name and emblem of one petroleum enterprise within the system of agents, even when acting as a retail agent through a General Agent.

3.4. Must post the selling hours and retail prices for each type of petroleum product clearly, without causing confusion to customers. The unit of measurement for motor gasoline, kerosene, diesel fuel: VND/liter, for heavy fuel oil: VND/kg or VND/liter.

3.5. Shall be responsible under the law and towards the assigning party regarding the quantity and quality of petroleum products sold out. Comply with regulations on measurement, quality of petroleum products and guidance, inspection by the petroleum enterprise or General Agent. Has the right to refuse to accept petroleum products from the assigning party if there is a basis to confirm that the assigning party does not ensure the quality of petroleum products according to the prescribed standards.

3.6. Shall not accept petroleum products from floating sources of unknown origin and outside the system for sale at the agency.

3.7. Regularly provide information to the assigning party about market conditions; cooperate with the assigning party to stabilize the market and meet consumption needs at all times.

3.8. Implement regulations on fire prevention and explosion safety, environmental hygiene, and other laws related to petroleum business operations.

Chapter III
Agency Contract

Article 6. Signing the Agency Contract

1. Enterprises wishing to act as agents for petroleum products must submit an application to the assigning party for signing the agency contract, which includes:

1.1. Business Registration Certificate, including registration of petroleum products: 01 certified copy.

1.2. Certificate of Eligibility for Petroleum Product Business of the retail store, gas station, specialized transportation equipment for petroleum products (in cases where self-organized transportation is carried out using their own means): 01 certified copy.

1.3. Plan for organizing the agency system for petroleum products in case of signing a contract to act as a General Agent with the petroleum enterprise.

1.4. Certificate of ownership of transportation equipment for petroleum products in cases where the agent assumes transportation using their own means: 01 certified copy.

2. Agency Contract:

2.1. Shall be concluded in writing in accordance with the provisions of the law based on the principle of agreement, voluntariness, equality, mutual benefit, direct material responsibility, and compliance with the provisions of this Regulation.

2.2. Both parties select and record in the contract the form of agency: commission agency or exclusive agency and relevant provisions, commitments regarding remuneration suitable to the form of agency.

2.3. Must include all main contents such as: name, address, tax code of the agent and the assigning party; quantity, quality, and type of petroleum products under agency, and responsibilities of each party; delivery, price, form of agency, agency remuneration, and other commitments in accordance with the law and this Regulation. The term of the contract shall be agreed upon by both parties, with a minimum of six months.

Article 7. Delivery of Agency Petroleum Products

1. Unit of measurement in delivery: for motor gasoline, diesel fuel, kerosene, the unit of measurement is liters (l); for heavy fuel oil: kilograms (kg) at actual temperature or converted to standard temperature at 15°C.⁰4. Liquid bull semen

2. Delivery location: both parties base on their conditions and transportation capacity to agree, can choose to deliver goods at the warehouse of the assigning party, or at the warehouse or store of the agent. The delivery location recorded in the contract serves as the basis for determining the agency remuneration.

3. Quantity delivery: the quantity of petroleum products delivered is recorded on the invoice issued by the assigning party. Determination of the quantity of goods delivered must comply with current national regulations.

4. Quality delivery: the quality of petroleum products delivered is recorded in the test report or quality certificate issued by the warehouse of the assigning party for each batch of goods, in accordance with current Vietnamese standards.

5. Procedures for delivering agency petroleum products shall be implemented in accordance with current regulations on agency goods delivery and rules for delivering liquid petroleum fuels.

Article 8. Transportation of Agency Petroleum Products

1. Only legal transportation means for petroleum products that meet requirements for technical safety, fire prevention and firefighting safety, and environmental hygiene, and have been issued a valid Inspection Certificate by competent state management agencies are allowed to participate in transporting agency petroleum products.

2. Transportation means for agency petroleum products must have complete invoices and documents for goods circulating on the road as stipulated by the Ministry of Finance.

3. Selection of transportation means for agency petroleum products, regulations on liability insurance for persons and means, ensuring safety during transportation, liability for quantity and quality of petroleum products, risk of loss, delivery procedures, transportation fees, and other provisions shall be agreed upon and committed to in the agency contract.

Article 9. On Petroleum Product Prices

1. Based on the State's guiding price and the authority of the petroleum enterprise as stipulated in Clause 3, Article 11 of the Regulation promulgated together with Decision No. 187/2003/QĐ-TTg dated September 15, 2003 of the Prime Minister, the petroleum enterprise decides specific selling prices, including: delivery price at the warehouse of the petroleum enterprise; retail price at stores and stations directly affiliated with the petroleum enterprise and at retail outlets throughout its entire distribution network.

2. The delivery price at the warehouse of the petroleum enterprise and the retail price shall be determined in writing in the form of a decision or price announcement and must be sent to units within the petroleum distribution network before the new price takes effect, including in cases of sudden changes.

3. Retail price serves as the basis for calculating delivery prices and agency fees for agents within the system of petroleum enterprises and must be kept stable. All retail outlets and service stations under petroleum enterprises and retail agents within the agent system shall not sell at a higher price than the retail price stipulated by the petroleum enterprise; they must display the retail price and sell at the displayed price.

Article 10. Agency Fee

1. The agency fee is a sum of money paid by the principal to the agent in the form of commission or price differential and shall be implemented according to the following principles:

1.1. The specific form and level of the agency fee shall be agreed upon and recorded in the agency contract by both parties. The level of the agency fee must ensure that the agent is adequately compensated for expenses, has reasonable and legitimate profit, and fulfills obligations to the state budget.

1.2. The agency fee must ensure fairness, equality, non-discrimination, and be clearly recorded in the agency contract.

2. The method and payment period of the agency fee shall be agreed upon and committed to in the agency contract in accordance with current regulations. Payment of the agency fee may be made in one lump sum or in installments as agreed upon and recorded in the contract, tied to the quantity of petroleum products received by the agent for sale.

Chapter IV
Inspection and Handling of Violations

Article 11. Responsibilities of the Department of Commerce

The Department of Commerce is responsible for leading and coordinating with local functional agencies to inspect and handle compliance with the provisions of this Regulation, specifically:

1. Organizing regular inspections or spot checks when necessary for all retail outlets and service stations of petroleum enterprises within their jurisdiction.

2. Inspecting and coordinating with petroleum enterprises to inspect major agents and retail agents within the distribution system when there are related incidents.

3. Promptly handling violations according to the law to ensure stability in the petroleum market within their jurisdiction, preventing smuggling, speculation, selling at incorrect prices, selling insufficient quantities, failing to meet quality standards for each type of petroleum product, and other fraudulent activities.

Article 12. Handling Violations

1. Domestic petroleum business enterprises violating the provisions of this Regulation shall be subject to administrative penalties or criminal proceedings depending on the severity of the violation, as provided by law.

2. The following violations will be penalized:

2.1. Not having a Certificate of Eligibility for Petroleum Business Operations or such certificate having expired.

2.2. Purchasing or selling petroleum without an agency contract or not complying with the agency provisions of this Regulation.

2.3. Failing to ensure the quality of petroleum sold meets the standard; fraudulent acts regarding quantity, quality, and mixing different types of petroleum products.

2.4. Not displaying the price at retail outlets or displaying a price higher than the retail price stipulated by the principal and selling at a price higher than the displayed price.

2.5. Purchasing or selling petroleum outside the system or untraceable petroleum.

2.6. Ceasing sales without a valid reason.

2.7. Not hanging signs or hanging signs that do not comply with the provisions of this Regulation at retail outlets.

2.8. Failing to ensure fire prevention and environmental sanitation as prescribed in Circular 14/1999/TT-BTM dated July 7, 1999, issued by the Ministry of Trade.

2.9. Other violations in petroleum business operations as prescribed by law./.