Vietnam Petrolimex sees decision soon on preferential forex rate

Vietnam’s top petrol distributor Petrolimex expects an answer from the government on its request to repay foreign currency loans at a preferred exchange rate after the finance minister returns from a trip abroad, company officials said on Thursday.

The state-run firm, which controls around 60% of the country’s pumping network, estimated it incurred a record loss of 2.65 trillion dong ($126.9 million) in the first three months of this year, its biggest quarterly loss ever, but is confident about securing fuel supplies.

It blamed the loss in part on an 8.5% currency devaluation by the central bank on Feb. 11 and has asked the government for permission to repay dollar loans at a pre-devaluation exchange rate.

“We have made a report (about the loss) and are waiting for the Minister of Finance to return from abroad. He and the Minister of Trade and Industry will work together to come to a decision,” Tran Ngoc Nam, director of Petrolimex’s finance centre, told Reuters.

It was not clear exactly when a decision would be made. Finance Minister Vu Van Ninh was expected to return on Friday from a trip to the United States.

Traders said on Wednesday Petrolimex had completed buying all the 144,000 tonnes of gasoline it sought for second-quarter delivery, and had acquired 70-80% of the 237,000 tonnes of diesel sought.

Nam said the company was able to get dollars at the official exchange rate and the situation was getting easier, thanks to supportive policies from the government, the trade ministry and the State Bank of Vietnam, the central bank.

“We are able to get dollars by payment deadlines,” he said, adding that the firm sourced most of its foreign currency from commercial banks, including its own PG Bank, and state-run Vietcombank .

It also sourced “a few millions dollars” directly from the State Bank of Vietnam, he added.

Vuong Thai Dung, Deputy Chief Executive Officer Of Petrolimex, said the group could buy dollars from banks but the pace was “a bit slow”. The group had demand for about $1 billion, he said.

Dung declined to comment on Petrolimex’s loss, but he sought to assuage concerns that supply could be disrupted.

“Fuel supply must be secured,” he said.

The distributor reported a pre-tax profit of 1.21 trillion dong last year. – Reuters

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