Vietnam urged to cut dependence on crude oil

In the short term, crude oil revenue can be affected by global oil prices and mining output; and the state budget has been significantly impacted by such fluctuations over the years, the NFSC noted.

In the long run, this source of income is also unsustainable as national reserves are limited, it added.

Earlier, Deputy Prime Minister Vuong Dinh Hue had said at a meeting of the legislative National Assembly that Vietnam needs to stop relying on crude oil and focus on tourism to ensure its economic growth.

“It is better to welcome one million tourists than trying to find one million tons of crude oil because tourism is more eco-friendly and safe for the economy,” he’d said.

Vietnam’s September crude oil exports totaled 375,000 tons, down 21.1 percent year-on-year, according to the General Statistics Office. This brought crude oil exports in the first nine months of this year to 2.97 million tons, down 45.2 percent from a year earlier.

From early this year to September 15, accumulated budget revenue is estimated to be at VND898.3 trillion ($39.06 billion), of which VND43.5 trillion ($1.89 billion) or about 5 percent comes from crude oil, according to the General Statistics Office.

Vietnam’s domestic crude oil production reached its peak in 2004 with an output of more than 20 million tons, but has declined to an estimated 14.2 million tons in 2017.

It is forecast that around 11 million tons will be produced in 2018. Crude oil exports have contributed 0.25 percent to the country’s GDP in recent years.