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Gas supplies at the pump dry up in Vietnam, forcing stations to close and leaving millions of drivers struggling, local reports said.
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Supplies are getting scarce because Europe is stepping up its buying, a government minister said.
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Domestic refinery issues and rising costs due to FX exchange rates are also hitting deliveries.
Gas stations in Vietnam’s Ho Chi Minh City have been forced to temporarily shut or suspend sales at the pump as their fuel supplies start to run dry, according to local news reports.
The supply crunch in Vietnam’s largest city, whose inhabitants rely on motorcycles to get around, means many of the millions of drivers there have struggled to get hold of gasoline. One motorcyclist reportedly told Nikkei Asia he had to wait 20 minutes before getting any fuel.
Gas stations in other big Vietnamese cities such as Hanoi, HCM City and the Mekong Delta have also shuttered, state-run Vietnam News Agency reported Monday. The government has ordered an official inspection of the closed businesses to check for violations of their trading agreements, the report said.
Refinery issues and rising costs are hitting distributors, which has hampered deliveries and squeezed supplies, the Nikkei report said. There is a lack of refineries in the southern part of Vietnam, where Ho Chi Minh City is situated.
Vietnam’s minister for industry and trade, Nguyễn Hồng Diên, said Saturday that supply of gas is dwindling as Europe steps up it buying of petroleum products, the VNA reported. He cited the high rate of exchange for foreign currency needed to buy gas imports and a lack of access to that currency to make payments.
At the same time, fuel distributors have had their profits squeezed in the face of government price controls, given they’ve been unable to pass on rising costs to the consumer, Nikkei Asia reported. That’s minimized the incentive to supply gas stations.
Oil prices have trended higher this year as sanctions on Russia over the Ukraine war squeeze supply, though they fell back after topping $120 as worries about demand emerged. But Brent crude, the international benchmark, has risen about 17% since its September low after OPEC+ slashed production quotas.
European importers are competing more closely with Asian buyers for supplies of oil and oil products as they search for alternatives to deliveries from Russia. The European Union’s embargo on seaborne Russian crude is scheduled to take effect in December, and the US is leading a separate effort to bring in a price cap on the country’s oil exports.
The problems at Vietnamese refineries kicked off at the start of the year, when production at the Nghi Son refinery in the north had to be cut, after it failed to obtain sufficient funds to import crude oil.
In mid-October, the Vietnamese government urged two refineries to boost production to full capacity in order to meet domestic demand. In response, PetroVietnam, the nations largest state-run oil giant, has said it will increase the operation rate at its refinery from 107% to 109%, Nikkei Asia reported
Vietnam isn’t the only country struggling from tight supplies of fuel. The US is currently facing a diesel shortage, and experts have said a knock-on effect on truckers could eventually impact food deliveries.
By Zahra Tayeb @ Insider
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Source: Vietnam Insider