Vietnam hit by fuel shortages as hundreds of retailers run dry

Prime minister orders probe of market, sales of state gasoline. Governments worldwide face surging prices as crude oil soars.

Vietnam is suffering from fuel shortages with hundreds of retailers forced to halt sales, prompting Prime Minister Pham Minh Chinh to order an investigation of the market including imports and exports of gasoline.

Nearly 300 petrol and oil retailers across the country have stopped product sales, according to the trade ministry, which carried out a round of inspections. Reasons ranged from insufficient supplies from wholesalers and distributors to workers contracting Covid-19, it said. Local media have published photos of shuttered petrol stations displaying signs that they had run out of gasoline.

The dislocation in Vietnam comes as a rally in crude oil to a multiyear high has boosted the prices of gasoline and diesel, fanning inflationary pressures and posing challenges for governments worldwide. In addition, Vietnam’s largest refinery, Nghi Son, was recently forced to reduce capacity from mid-January due to financial difficulties, according to the VnExpress news website.

Chinh has ordered the finance and trade ministries to provide a proposal to adjust the environmental protection tax on gasoline and other oil products, according to a statement. Extra inspections of suppliers, distributors and retailers are under way to prevent hoarding or other violations.

The trade ministry, meanwhile, plans to auction about 102 million liters of RON-92 gasoline from national reserves, with a starting price of about 14,058 dong (62 U.S. cents) a liter, according to a separate VnExpress report.

Oil refiners throughout Asia have been increasing run rates, but that’s done little so far to alleviate the problem as unplanned outages from the U.S. to Asia crimp output. Product supplies may remain tight in Asia, with several refineries set to undertake scheduled maintenance in the second quarter.

Fuel traders are monitoring Vietnam’s supply balances for diesel and gasoline, particularly as stockpiles of the former have hit a multiyear low. The Nghi Son refinery supplied 34% of the country’s total petroleum in 2021.

Bloomberg – February 23, 2022