Commercial banks in Vietnam have been asked to prioritize credit support for petroleum traders, seen as a necessary move to ensure sufficient supplies of petrol for the domestic market.

Petrol prices continue to go up in Vietnam. Source: VTV

The move was revealed in a directive issued by the Governor of the State Bank of Vietnam Nguyen Thi Hong, following instruction from Prime Minister Pham Minh Chinh for Government agencies to take measures and avoid risks of shortage of petrol supplies in the country.

Under the plan, credit loans would be provided for major petrol trading companies under the list of the Ministry of Industry and Trade, especially those who have been instructed to raise their petrol imports in the coming months.

The SBV also urged banks and credit institutions to push for simplification of internal procedures to cut time and cost in processing loans, as well as diversifying credit products to better meet customers’ demands.

Leaders of commercial banks are responsible for ensuring the effective implementation of the plan to provide trading companies with sufficient capital for petrol imports.

During an interpellation session held at the National Assembly on March 16, Deputy Prime Minister Le Van Thanh considered petrol products a key commodity with direct impacts on socio-economic activities.

Thanh expected the Government to have the required instruments available to keep adequate supplies of petrol for economic activities.

Thanh, however, acknowledged domestic production has only been able to meet 70% of the demand or 13 million cubic meters, mainly thanks to the two oil refinery plants of Binh Son and Nghi Son.

 “Petrol reserves as of February 10 were estimated at 1.2 million tons, along with 0.9 million tons of domestic production and   0.9 million tons imported. This is more than enough to cover the domestic demand of around 1.8 million tons per month,” Thanh said.

In the short term, the DPM said the Government would focus on raising domestic production and imports to meet the needs in the upcoming two or three months.

For the long term, Thanh said the key issue for Vietnam is to avoid dependence on petrol imports. In this regard, the Government has requested the Vietnam National Oil and Gas Group (PetroVietnam) to build an additional oil refinery plant in  Vung Tau with a production capacity of up to 10 million cubic meters per year.

“With an estimated 10 million cubic meters of petrol from this plant, along with the current 13 million cubic meters from the other existing two, we would have a combined  23 million cubic meters to meet domestic demands,” Thanh said.

Thanh also hinted at the possibility of raising oil exploration capacity, which currently meets only 50% of the demand for petrol production.

The retail prices of biofuel E5-RON92 and RON95 in Vietnam rose to an all-time high of VND28,980 (US$1.27) and VND29,820 ($1.3), respectively, on March 11.

The latest price adjustment marked the seventh hike in a row since mid-December 2021, bringing the prices of petroleum products to above the previous peaks in July 2014 of VND26,140 per liter and closer to VND30,000 per liter.