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Monday, June 24, 2024

Fuel costs poised to spike

The Saigon Times

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HCMC – The local fuel price has skirted VND27,000 per liter of A95 gasoline after being adjusted on March 1, but traders say they are still incurring losses due to a spike in global prices and unstable supply.

Do Quang, director of a fuel trading firm in Hanoi’s Ha Dong District, said the discount offered to fuel retailers by distributors has fallen to VND70-100 per liter from March 5 and would continue to drop to zero dong from March 6, meaning retailers will earn no profits.

If costs in terms of transportation, labor, and other overruns are taken in account, fuel traders will experience losses of VND400-500 for each liter of petrol sold.

Quang added that the import of some products such as bio-fuel RON92 and fossil fuel RON95 is being restricted. “We still order fuel from distributors, but whether we will receive fuel or not remains unknown. If fuel products are in stock, we will continue to sell them, but the more we sell, the bigger losses we face,” Quang said.

Nguyen Xuan Thang, director of La Khe fuel retail facility, under Xuan Thang Petrol and Oil Company, told Lao Dong newspaper that although fuel products are currently in short supply, his firm has tried to meet customers’ demand.

To ensure enough fuel products for sale, Thang asked his employees to sell fuel to vehicle users only and not serve those that buy fuel in large quantities for stockpiling.

Commenting on the issue, a local fuel trader in Hanoi said the current fuel supply is volatile. Major fuel distributors were likely to restrict providing fuel products to fuel traders. According to him, given the current global fuel price, domestic fuel prices could rise sharply in the next fuel price adjustment on March 11. Local fuel firms could incur losses of nearly VND2,500 for each liter of gasoline sold and VND3,000 for each liter or kilogram of oil sold.

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