Vietnam urges fuel traders to release stocks to ease supply crunch concerns

Vietnam on Wednesday called on its largest fuel trading firms to release their stocks amid concerns about a fuel supply crunch.

Several gas stations in its largest cities have over the past weeks shut or limited sales, citing financial difficulties and tight domestic supplies.

Nearly 110 out of 550 gas stations in business hub Ho Chi Minh City are experiencing inventory shortages, online news provider VnExpress reported. The problem has spread to Hanoi and other parts of the country.

“Petroleum products are an indispensable source of energy for the economy…and therefore leading fuel trading firms have to keep the supply from being disrupted,” Minister of Industry and Trade Nguyen Hong Dien said in a statement.

Dien last week blamed fluctuations in the foreign exchange rate and difficulties faced by some fuel importers accessing credit from banks for the situation.

Traders said low profit margins appeared to be discouraging retailers from keeping gas stations open because authorities had a cap on retail prices.

Dien on Wednesday also called on the country’s two refineries to maintain full operations. These refineries, with combined capacity of 330,000 barrels per day, supply 70% to 80% of Vietnam’s fuel needs.

Vietnam’s refined fuel imports in the first 10 months of 2022 rose 22.8% from a year earlier to 7.13 million tonnes, but costs rose 123.8% to $7.37 billion, according to official data.

Top fuel importer Petrolimex is looking for two cargoes of 35,000 tonnes of 500ppm sulphur gasoil for December loading and one cargo of 35,000 tonnes of 10 ppm sulphur gasoil for end-November loading, Singapore-based traders said.

By Khanh Vu – Reuters – November 2, 2022