Locally-made fuel gains price edge

Domestic demand for the Dung Quat Oil Refinery’s petroleum products has been rising sharply due to exchange-rate volatility and an imbalance in foreign-currency supply and demand

Domestic demand for the Dung Quat Oil Refinery’s petroleum products has been rising sharply due to exchange-rate volatility and an imbalance in foreign-currency supply and demand, said Nguyen Hoai Giang, general director of the Binh Son Refining and Petrochemical Co Ltd, the refinery’s operator.

The refinery, which began operations in February last year, now has roughly 100,000 tonnes in stock, its best level to date, and is running at full capacity to meet rising demand, Giang said.

The refinery’s increasing stock—roughly 250,000 tonnes by the end of September—caused the Ministry of Industry and Trade to ask domestic fuel importers to increase their purchases of the refinery’s products to help eliminate excess stock.

However, the shortage of dollars and the dong’s weakness against the dollar has changed the situation. Many domestic traders and distributors are queuing up to order the refinery’s products, said Giang.

Giang forecast that domestic demand would skyrocket next year and the refinery would likely see a shortage in supply.

Domestic fuel traders and distributors also admitted that purchasing from domestic fuel producers would be the best choice in the current climate.

Purchasing from the refinery would help us deal with the volatility of exchange rates, said Director of the Viet Nam Air Petrol Company Tran Huu Phuc.

To actively prepare for future production and distribution plans, the Binh Son Refining and Petrochemical Co Ltd last month signed contracts with four local partners to distribute the refinery’s petroleum products next year.

Under the contracts, Dung Quat will supply a total of 4.7 million cu.m of petrol products, including Mogas 92, Mogas 95, diesel, Jet A1 plane fuel and fuel oil (FO).

Binh Son Co will provide 2 million cu.m for the Viet Nam National Petroleum Corporation (Petrolimex), 1.5 million cu.m for the PetroVietnam Oil Corporation, 1 million cu.m for the Petec Trading and Investment Corporation and 200,000cu.m for the Viet Nam Air Petrol Company.The refinery has churned out 7.82 million cu.m of various petrol products so far and it is estimated that the refinery will produce 5.8 million cu.m next year. They will stop operations next July and August for scheduled maintenance.

In the first nine months of this year, the refinery’s petrol and oil sold on the domestic market accounted for 35% of the country’s total consumption volume.- VNS

Tags: Dung Quat oil refinery