Gas stations run out of fuel in southern Vietnam
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Gas stations in several southern localities have run out of supplies of petrol, diesel and other fuels and have stopped doing business.
In Tinh Bien District, An Giang Province, six gas stations that get their supplies from Ho Chi Minh City-based Dai Dong Duong Petroleum JSC have stopped selling since Monday.
A Dai Dong Duong representative said that they have not been able to buy fuel from distributors for the last five days.
He attributed the supply shortage to seven fuel distributors who had their import license revoked for 1-2 months mid-August for violating safety and stockpiling regulations.
Also, distributors are giving supply priority to companies in their own system on learning that market prices are going up.
Huynh Van Thanh, owner of the Thanh Loi station in An Giang’s Cho Moi District, said his station had been out of diesel for two days as of Tuesday, but the distributor would not supply the fuel until Sep. 6.
As for gasoline, his station has not bought enough to meet demand for fear of making losses.
Thanh said that the station is given a discount of VND210 for each liter of gasoline and is allowed to buy a maximum of 3,000 liters at a time, which means a total profit of VND630,000 ($27).
Meanwhile, the cost of renting a tank truck is VND900,000, which means the station has lost VND270,000 even before it has started selling. Then there is the cost of electricity and staff salaries. Every day the gas station loses VND1.5-2 million, he said.
According to the An Giang Market Management Department, as of Monday, 19 petrol stations across the province had closed while 36 had announced they were running out of fuel, accounting for nearly 10% of gas stations in the province.
The department said the stations were running out of fuel because it was difficult to get them from distributors
“Meanwhile, the cost of renting a tank truck is VND900,000, which means the station has lost VND270,000 even before it has started selling.”
A similar situation has been reported in the Mekong Delta province of Dong Thap.
Nguyen Huu Dung, director of the province’s Industry-Trade Department, said Tuesday that in the past week, 10 petrol stations have asked to temporarily close for “personal reasons.”
He said it is possible that they want to stop selling to avoid losses.
“The department received an application from a station to suspend operation for three months because they were losing VND350 dong for every liter of gasoline,” he added.
Also in the Mekong Delta, the Market Management Department of An Giang Province said two of 132 stations have halted operations while two others announced they’ve run out of gasoline.
A representative of the Chau Thanh Petroleum Trading Service Co., Ltd in Tien Giang, which supplies fuel to 114 stations in the province, said it holy has enough in stock to distribute in three days.
The reserves of this firm were running out and supply from its distributor, the Military Petroleum Company Region 4 based in HCMC was deficient, the rep said.
In HCMC and neighboring Dong Nai Province, many dealers said that the amount of imported gasoline has dropped as increasing prices of oil and gas are making importers and distributors worry about suffering losses.
The Vietnam Petroleum Association had proposed Monday that the Ministry of Industry and Trade regulate the price of gasoline on Sep. 1, instead of waiting until Sep. 5, given the strong fluctuations in global fuel prices.
Nguyen Minh Duc with the legal department of the Vietnam Chamber of Commerce and Industry (VCCI), said the current regulation of waiting for ten days to make changes in gasoline prices does not still cannot allow local businesses to keep pace with price fluctuations in the international market.
That leads to the situation wherein gas stations run out of stock before each price adjustment, he said.
Questions & Answers
Q.Which areas in Vietnam are most affected by these fuel shortages?
Which areas in Vietnam are most affected by these fuel shortages?
The shortages are concentrated in southern localities, including Tinh Bien District in An Giang Province, other parts of An Giang, and the Mekong Delta provinces of Dong Thap and Tien Giang. Similar issues are reported in Ho Chi Minh City and Dong Nai Province.
Q.What are the main reasons given for the current fuel supply problems?
What are the main reasons given for the current fuel supply problems?
Distributors face difficulties buying fuel, partly due to seven distributors having import licenses revoked in mid-August. Distributors are also prioritising their own internal systems as market prices rise. Concerns about losses due to fluctuating import prices are also mentioned.
Q.Why are some individual gas stations choosing to close or limit their fuel sales?
Why are some individual gas stations choosing to close or limit their fuel sales?
Gas stations are struggling to make a profit due to low discounts on fuel and high operational costs, such as renting tank trucks. They are losing money on each litre sold, making it uneconomical to operate.
Q.What changes have been proposed to help address the situation with fuel prices?
What changes have been proposed to help address the situation with fuel prices?
The Vietnam Petroleum Association suggested the Ministry of Industry and Trade regulate gasoline prices earlier than planned, given the global price fluctuations. It was also noted that the ten-day waiting period for price adjustments hinders local businesses' ability to keep pace with international market changes.
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