HCMC – The Ministry of Industry and Trade has said it is planning to boost national fuel reserves to 30 days of domestic consumption amid global oil market volatility.
Nguyen Thuy Hien, deputy head of the Planning Department at the ministry, told a news briefing yesterday, June 16, that the ministry is in the process of drawing up a plan to expand national fuel reserves.
The plan will be forwarded to relevant ministries and agencies for feedback before it goes before the Government and the National Assembly, she added.
The current national fuel reserves are equivalent to five to seven days of domestic consumption, a level which the ministry said is way too low.
Government Decree 95/2021/ND-CP, which came into force on January 2 this year, requires fuel wholesalers and oil refineries that have distribution systems to ensure fuel storage equivalent to at least 20 days of supply, down from the previous 30 days. Meanwhile, fuel distributors are required to store a volume equivalent to at least five days of supply.
The lower-than-before fuel storage has been blamed for recent domestic fuel supply disruptions.
Deputy Minister of Industry and Trade Do Thang Hai said the ministry had sent out inspection teams to check whether fuel traders and producers comply with the fuel reserve requirement.
The domestic fuel supply disruptions also resulted from the Nghi Son oil refinery’s output reductions to 55-80% capacity, Hai said, adding the refinery’s brief production suspension induced by technical failures made matters worse.
Soaring global oil prices left adverse impact on fuel imports into the country, so the ministry ordered trading firms to boost imports and the situation is now stable, he noted.
Expanding national fuel reserves to one month, coupled with the requirement for compulsory fuel storage at trading and production companies, would help ward off fuel supply disruptions, but this would take time, according to the ministry.
In other countries, fuel reserves are equivalent to 90 days of consumption, Hai said, noting Vietnam is weighing the possibility of gradually scaling up fuel reserves but the financial issue remains to be solved.
This year has seen fuel prices adjusted up for six consecutive times. The price of the standard RON95 gasoline early this week shot up to a new record high of VND32,270 a liter, and that of the bio-fuel E5 RON92 to VND31,110 per liter.