Gas stations limit sales as supply shortage persists
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Gas stations across the country are again complaining about supply shortages and losses due to surging prices, which are forcing them to limit sales. In the southern province of An Giang, some limited sales to VND30,000 ($1.32) per customer on Tuesday, forcing buyers to go to another station to fill the rest of their gas tank. Nine stations have closed down and it is confirmed they have run out of stocks, the province Market Surveillance Department said.
In other southern localities like Binh Duong Province and Ho Chi Minh City too, some gas stations reported shortages.
“Oil imports have fallen by 40-50 percent since before the price increase,” Do Thanh Han, CEO of Quoc Thang Ltd, which has eight gas stations in Binh Duong, said. He was referring to the 3.9-percent gasoline retail price hike the government affected last Friday. The CEO of a gasoline distribution company in HCMC said supply has fallen by 30 percent below normal.
In Hanoi, Nguyen Van Tiu, CEO of Tu Luc Gas and Oil Co., said it has been very difficult to source supply in the last two days. With wholesalers increasing prices, his company’s commission has fallen from VND200 per liter to zero, he said. The increase last Friday was the fourth since December after a period of calm.
The popular RON 95 gasoline is now at an eight-year high of VND25,320 per liter, having risen by 11 percent this year. The retail price surge has caused many gas stations to sell at a loss as they say wholesale price exceeds retail price and force them to have zero commission or less.
Tran Thai Binh, owner of eight stations in the southern province of Dong Thap, said that the company has been losing nearly VND2 million a day for over a month due to falling commission.
Some stations have closed down to avoid a bankruptcy.
“We cannot hold on anymore”, said Hoang, owner of a gas station in the Central Highlands in his request to the Ministry of Industry and Trade for permission to stop selling for a week.
“Oil imports have fallen by 40-50 percent since before the price increase,”
Hoang has not been able to source inventory since last Friday.
“If we continue to operate, we will go bankrupt”.
Tran Duy Dong, head of the trade ministry’s domestic market agency, said that supply is low because the country’s biggest refinery Nghi Son is only operating at 55 percent of capacity.
It is set to reach 80 percent by the end this month and 100 percent next month.
Some consignments are arriving and the shortage will be eased in the next one or two weeks, he added.
The reason stations report losses is because global rates increased during Vietnam’s Lunar New Year holiday Tet, which means authorities only raised prices up accordingly after, and by then stations have already been selling at a loss, Dong said.
Questions & Answers
Q.What is causing the current supply shortage at gas stations?
What is causing the current supply shortage at gas stations?
The country's biggest refinery, Nghi Son, is operating at 55 percent of its capacity. Oil imports have also fallen by 40-50 percent since before the recent price increase, contributing to the reduced supply.
Q.Why are some gas stations reporting financial losses and closing down?
Why are some gas stations reporting financial losses and closing down?
Wholesale prices are reportedly exceeding retail prices, leading to zero or negative commission for stations. Global rates increased significantly during the Tet holiday, and authorities only raised retail prices later, causing stations to sell at a loss in the interim.
Q.What measures have some gas stations taken due to the supply issues?
What measures have some gas stations taken due to the supply issues?
Some gas stations have limited sales to a set amount per customer, such as VND30,000, forcing buyers to visit multiple stations. Others have closed down completely to avoid bankruptcy, with some requesting permission to stop selling.
Q.When is the supply shortage expected to ease, according to the trade ministry?
When is the supply shortage expected to ease, according to the trade ministry?
The shortage is expected to ease in the next one or two weeks. The Nghi Son refinery is set to reach 80 percent capacity by the end of this month and 100 percent next month, with some consignments also arriving.
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