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June 25, 2018

New Decree May Open Up LPG Business in Vietnam

On June 15, 2018, Vietnam’s government issued Decree No. 87 on Business in Gases, which governs various aspects of doing business in liquefied petroleum gas (LPG), liquefied natural gas (LNG), compressed natural gas (CNG), and others.

Decree 87 contains regulations on conditions for import, export, producing, processing, mixing, bottling and selling (both wholesale and retail), and transport of LPG and other gases. Other provisions govern standards/testing for canisters and the repair of canisters. Further regulations govern safety in regard to transport and retail sales of LPG and other gas canisters, as well as safety in relation to storage tanks.

One notable requirement of Decree 87 is that exporters and importers need to have their own port, or rent an authorized port for a period of five years, in order to meet the conditions to be an exporter or importer.

It is expected that the new decree may open up the sector more, as it loosens some older regulations that had set out certain minimum requirements on scale, some requirements on ownership of facilities, and some requirements on setting up distribution networks. For example, one previous regulation required distributors to have at least 100,000 gas canisters, but this requirement has been eliminated.

Decree 87 will enter into effect on August 1, 2018. It replaces Decree 19 of 2016, and repealed one chapter of Decree 77 of 2016. Under Decree 87, various forms for applying for the requisite licenses were also promulgated for use by businesses.

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