Motorists in Vietnam’s capital are going through a crisis as many gas stations are closing down due to fuel shortages. Most Vietnamese use motorcycles for a commute to work and school. Thus, the news of gas stations closing down or limiting sales has troubled the public.
Despite the news, the Vietnam government stated they are not facing fuel shortages. The government added that they have enough fuel stocks — 3 million cubic meters. The fuel is said to be sufficient in meeting domestic demand until the end of November. Furthermore, the domestic refineries that supply between 70%-80% of Vietnam’s fuel needs are running at capacity.
Why are the gas stations closing?
Nevertheless, there are several reasons for gas stations to close down and limit their sales. Firstly, fuel distributors are unable to pass on their rising costs. Then, smaller fuel distributors are affected hard by this, and it has discouraged them from taking supplies to gas stations as their profits become scanty. Besides that, there is a lack of refineries in Ho Chi Minh City which accounts for 45% of Vietnam’s oil and petrochemical products. Another reason for the fuel supply constraints is caused by the operating rate fall of the Nghi Son Refinery earlier in 2022.
What are the solutions to this matter?
As solutions are being discussed by the government, the PetroVietnam group’s Dung Quat is suggesting expanding the refining capacity. It is planning to add the capacity by 20%. From that, it could produce around 170,000 barrels a day by 2022. The budget of the plan is expected to cost $1.2 billion. Furthermore, Dung Quat is also planning to construct a complex near Ho Chi Minh city. It is hoped that the complex could help in reducing the cost of transporting petroleum products.
Sources: Nikkei Asia, The Economic Times, Radio Free Asia