Vietnam National Petroleum Group (Petrolimex) reported profit of a mere VND4.8 billion last year, a small fraction of the VND1.6 trillion recorded in the previous year.

Its holding firm saw its profit tumbling to VND67 billion last year, or nearly one-tenth of the VND710 billion achieved in the year earlier.

The group attributed the profit drop to losses of over VND1.14 trillion in the fourth quarter of last year compared to profit of nearly VND360 billion in the same period of 2013 due to continuous fuel price reductions.

Petrolimex’s general director Tran Van Thinh explained why Petrolimex incurred losses in the period in a recent financial report sent to the State Commission Securities (SSC).

As the group’s core businesses include fuel trading, plunging fuel prices in the fourth quarter of last year hit the group’s earnings in the same year. In addition, it must stock up on fuels for 30 days while the base price is calculated on an average of 15 days as required by the Government’s Decree 83/2014/ND-CP.

The lower-than-expected earnings of Petrolimex in the fourth quarter and all of 2014 were announced by its leaders at earlier meetings, including a review meeting of the Ministry of Industry and Trade.

To prop up its earnings this year, Petrolimex will diversify sales channels, especially for fuel retail as this is one of the 10 most important business orientations this year.

Thinh said on the enterprise’s website that increasing sales was among the tasks to realize its targets this year in the face of tough competition on the local market.

Thinh said the firm would expand its distribution system.

According to Petrolimex, there are 19 fuel wholesalers on the domestic market and competition among them is getting fiercer.

Speaking to the Daily a year ago, Petrolimex’s deputy general director Tran Ngoc Nam said the group had around 2,200 filling stations and this number excluded thousands of retail points run by its agents.

Petrolimex now holds a lion’s share of 47.8% on the local fuel market, according to economic expert Ngo Tri Long.