Vietnamese fuel distributors are negotiating with foreign suppliers to ensure adequate inventory for the holiday after the country’s biggest refinery cease imports due to cash shortage.
PVOil, the second biggest fuel distributor in Vietnam behind Petrolimex, has secured a deal with a foreign supplier to import more gasoline amid the expected shortage.
The supplier gave an acceptable price with reasonable delivery time, said Cao Hoai Duong, company chairman, without revealing details of the supplier and price.
The fact that Nghi Son Oil Refinery has cut down its production from 105 percent to 80 percent due to insufficient funds is urging fuel distributors to scramble for solutions to have enough inventory for the upcoming nine-day Tet holiday, which begins Saturday.
“The imports, together with our backup inventory, is enough for PVOil to cover the expected market shortage before, during and after Tet,” Duong said.
An anonymous director of a central distributor said the company has finally been able to secure a deal with a supplier and will have enough inventory for the holiday.
A media representative of leading distributor Petrolimex did not say whether it would import more as the company is still receiving the agreed amount of inventory from Nghi Son.
“In whatever scenario we will strive to ensure there would be sufficient inventory to distribute to the market.”
Nghi Son said that it had to cut production because state-owned energy giant Petrovietnam has not approved import contracts and therefore it has to cancel two crude oil imports this month.
Therefore the factory might have to shut down in mid-February.
However, Petrovietnam stated Wednesday that the factory canceled the two shipments and that it had nothing to do with the approval of import contracts.
Matters concerning the contracts are part of Nghi Son’s restructuring plan, which is under negotiation, the statement read.
Nghi Son Oil Refinery has a capacity of 200,000 crude oil barrels a day, or 10 million tons a year, twice that of Vietnam’s other refinery Dung Quat Oil Refinery in Quang Ngai Province.
State-owned fuel company Petrovietnam has a 25.1 percent stake in the plant, while the rest are owned by three foreign firms: Kuwait Petroleum International (35.1 percent and Japanese companies Idemitsu Kosan (35.1 percent) and Mitsui Chemicals (4.7 percent).
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