Vietnam Grapples With Fuel Supply Crunch

Hundreds of gas stations have closed amid financial difficulties and tight domestic supplies.

November 07, 2022

HANOI—Vietnam is still having trouble securing refined petroleum products, according to Nguyen Hong Dien, the country’s industry and trade minister. Reuters reports that hundreds of gas stations in major Vietnamese cities have closed or cut down on the amount of fuel sales during the past few weeks because of financial difficulties and tight domestic supplies.

"Global supplies are getting tighter as countries are rushing to buy ahead of OPEC+ output cuts and further sanctions on Russia," Nguyen Hong Dien told parliament.

Vietnam has two refineries, which together have a capacity of 330,000 barrels a day, suppling 70%-80% of the country’s fuel demands, but the country also relies on imported crude oil, according to Dien.

The increase in the U.S. dollar has made fuel imports more expensive. The Vietnamese dong currency has lost 8% against the dollar this year. Also, fuel importers are having trouble accessing bank loans to pay for their imports as they fail to meet banks' requirements.

The country’s central bank held emergency meetings last week with commercial banks to talk about liquidity in the system. Lenders are experiencing tighter credit conditions and higher interest rates.

Lat Wednesday, Vietnam urged its largest fuel trading firms to release stocks to ease concerns about a fuel supply crunch.

"Partial fuel disruption in the local market is threatening to continue at least until November 11 when the finance ministry adjusts the costs for fuel importers," Dien said.