HA NOI — Poor fuel forecasting and lack of communication had caused Viet Nam to spend valuable foreign currency on importing petrol while domestic petrol was in oversupply, the Ministry of Industry and Trade said this week.
It has also contributed to Viet Nam National Petroleum Corporation (Petrolimex) losing US$41 million in exchange rates so far this year.
Deputy Minister Nguyen Cam Tu said only 9 out of 11 petrol enterprises had bought petrol produced by Dung Quat Oil Refinery this year, using only 30-40 per cent of its production capacity.
Petrolimex, which accounted for 60 per cent of the country's market share of petrol, had been expected to buy 28 per cent of Dung Quat's output, but had only bought 19 per cent.
Tu explained that the reason for the high imports was a shortfall last year when the new refinery had failed to reach its production target due to teething problems and as a result petrol traders had had to import petrol in order to ensure supply.
This year, traders had again signed contracts to import fuel, hedging against the same thing happening again at the refinery, but the plant had ironed out its problems.
Since August it had been producing to its design capacity, which was equal to 6.5 million tonnes a year, or 30 per cent of the country's needs, exceeding its own yearly plan by 25 per cent.
Thus while local production was up, local demand was down as domestic traders would suffer heavy losses if they cancelled their import contracts.
The differences in exchange rates had already caused Petrolimex a loss of VND800 billion (US$41 million) since the beginning of the year.
To address the problem, PetroVietnam would plan and work with petrol traders to limit stockpiled petrol and restrict imports.
In the meantime, Petrolimex had targeted to double petrol consumption from the refinery in the next three months and six out of 11 petrol importers had sought to reduce their imports to 700,000cu. m.
To date, the plant had processed 4.98 million tonnes and sold 4.74 million tonnes; in particular 4,500 tonnes of aviation fuel Jet A1 fuel was sold to PB Singapore Petroleum Company.
The country had imported 7.84 million tonnes in the first nine months, or 67.6 per cent of its forecast consumption for the year. — VNS
