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Vietnamese filling stations shut down over supply shortage, losses

Vietnamese filling stations shut down over supply shortage, losses

Tuesday, February 08, 2022, 14:21 GMT+7
Vietnamese filling stations shut down over supply shortage, losses
A filling station runs out of RON95 gasoline in An Giang Province, Vietnam. Photo: Buu Dau / Tuoi Tre

Many filling stations in Vietnam have been closed over the past few days, with fuel businesses attributing the close-down to either lack of supply or ailing operations.

In the Mekong Delta province of An Giang, the operator of a filling station in Phu Tan District said he had shuttered his facility since Saturday due to losses.

The operator added he purchased RON95 gasoline from his wholesaler at VND24,560 (US$1.08) per liter, which was exactly the same price at which he sold the fuel to his customers.

The prices of fuel that residents buy from filling stations in Vietnam are promulgated by the Ministry of Industry and Trade and the Ministry of Finance.

At Petrol Station No. 58 in Chau Doc City, An Giang, RON95 gasoline has run out for about four days.

The facility is only selling E5RON92 fuel but at a low amount.

Nguyen Ngoc Thoi, director of An Kien private business in An Giang, said he received a commission of up to VND1,000 ($0.04) per liter of gasoline from his wholesalers.

Many fuel wholesalers are suffering losses, which shaved about VND500 ($0.02) per liter off retailers, Thoi elaborated.

Huynh Ngoc Ho, head of An Giang’s Market Management Department, confirmed that 23 petrol stations in the province had temporarily suspended their operations, with most facilities attributing their closure to lack of supply.

The department is now working to find out whether or not these stations are waiting for fuel prices to increase to resume operations.

In Hanoi, no filling station had to shut down as of Monday, but some places ran out of E5RON92 gasoline.

In Dak Glong District, located in the Central Highlands province of Dak Nong, multiple filling stations have been temporarily shut down due to the lack of supply.

Local residents had to travel tens of kilometers to Gia Nghi City to buy gasoline.

Losses among wholesalers

Tran Thanh Trung, deputy director of Petrolimex An Giang, a subsidiary of state-run fuel giant Petrolimex, said the unit supplies 7.7 to 7.9 million liters of fuel per month and is suffering losses of nearly VND1,000 ($0.04) per liter.

Petrolimex An Giang holds a 35 percent market share in the Mekong Delta province, Trung continued, adding that the firm is not allowed to shut down as it is a state-owned enterprise.

The deputy director called on other fuel wholesalers to resume normal operations to ensure energy security.

According to Phan Nguyen Sa Truc, director of Mekong Petroleum JSC-An Giang branch, a private petrol station must have a profit of at least VND500 per liter to ensure salaries for its employees.

Both fuel wholesalers and retailers have been suffering losses, Truc continued, adding that the Ministry of Industry and Trade and the Ministry of Finance did not adjust fuel prices in the country in the most recent session due to the Lunar New Year festival, which fell on February 1.

Another session will take place on February 11, Truc added.

Response from wholesalers, trade ministry

A representative from Petrolimex told Tuoi Tre (Youth) newspaper that the group has been unable to increase fuel provision to its dealers due to supply shortage at Nghi Son Refinery and Petrochemical plant in north-central Thanh Hoa Province.

Petrolimex has been looking for import sources to cope with the problem, the representative added.

A representative of a fuel wholesaler based in southern Vietnam stated that petroleum reserves have decreased since after Tet, while supply shortage has not been solved.

“The more we sell, the more we lose,” he continued.

“We currently lose about VND1,500 [$0.06] per liter of gasoline and VND1,000 per liter of oil and may have to shut down if this situation persists.”

Tran Duy Dong, an official from the Ministry of Industry and Trade, said that the agency had reported the situation to the central government for solutions.

In the meantime, the trade ministry has asked local authorities to deal with petrol units that shut down on purpose as they wait for fuel prices to increase.

Dong confirmed that Nghi Son Refinery is only operating at 60-80 percent of capacity, adding that it is unclear when the facility will resume full swing.

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Duy Khang - Buu Dau / Tuoi Tre News


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