Petrolimex fears interrupted petroleum supply

The difficulties in accessing foreign currency have raised the worry that the petroleum supply may be interrupted as distributors cannot buy enough dollars for imports.

When talking with Dau tu’s reporters, Vuong Thai Dung, Deputy General Director of Petrolimex, which holds 60 percent of the petroleum market, did not focus on the heavy losses the corporation is incurring. “It is obvious that we are incurring heavy losses, since we have to sell petroleum products at the prices lower than the cost prices. Everyone knows this,” Dung says. “The bigger headache for us now is that how to ensure sufficient supply for people”.

According to Dung, providing enough petroleum products to the national economy and consumers is a big burden to Petrolimex and other petroleum enterprises, as it is very difficult to access banks’ sources of foreign currency.

“The Prime Minister has instructed commercial banks to sell foreign currencies to Petrolimex for petroleum imports. The commercial banks that we have contacted have also been making every effort to arrange foreign currencies for us. However, the volume of foreign currencies we can purchase is not big enough,” Dung says.

Every year, Petrolimex needs about six billion dollar to import petroleum products, or 500 million a month. Petrolimex believes that banks struggle to arrange enough dollars to sell to Petrolimex.

In principle, Petrolimex can borrow dollars from banks to make payment for imports. But of the amount of foreign currency that banks can lend to Petrolimex is limited. Not to mention, it will be now difficult to then collect enough dollars to pay bank debts.

Cao Van Han, Managing Director of the Military Petroleum Corporation, also complains that it is difficult to buy dollars from banks, even though petroleum enterprises are always prioritized in purchasing dollars. The enterprises are requested to provide enough products to serve the economic development and national defense. The noteworthy thing is that enterprises cannot buy dollars even when they have a lot of money in dong.

Petroleum importers also complain that it is getting more difficult to find supply sources at this moment, as China is increasing the volume petroleum imports from Singapore – which is also the main supply source for Vietnam. Meanwhile, the world prices are very high.

Vietnamese people have been warned that the petroleum prices will increase in the coming days. Petroleum importers have been continuously complaining that they are incurring loss and have been insisting on petroleum price increases.

A lot of filling stations in Hanoi and HCM City, firmly believing that the petroleum prices will increase, have been selling petrol in dribs and drabs. They speculate now to sell petrol later, when the prices go up. Meanwhile, according to Dung, the volume Petrolimex’s filling stations are selling these days is 30-40 percent higher than in normal days.

Petroleum importers have said that the petrol price needs to increase by 3000 dong per liter in order for them to make profit. By February 15, petroleum distributors had been incurring the loss of 2801 dong for every liter of petrol sold. Meanwhile, Petrolimex has reported the loss of 70 billion dong per day.

According to VnMedia, the Ministries of Finance and Industry and Trade have said that theyallow the raising of the petroleum prices in late February. – Dautu

Tags: petroleum, Petrolimex