The Ministry of Industry and Trade is considering quadrupling the national oil reserves equating to a month’s consumption as global prices continue to rise.
Current reserves can only meet five to seven days of consumption, and the ministry is seeking opinions from the Ministries of Finance and Planning and Investment about the expansion, Nguyen Thuy Hien, deputy head of the ministry’s planning department, said at a press briefing Thursday.
“As the government’s resources are limited, the increase in the reserves will be implemented gradually from now through 2025.”
For now the government would continue to lease storage space from fuel businesses, but would eventually build its own, she said.
It also requires fuel distributors to keep reserves to meet a minimum of 20 days’ demand.
Oil refineries have their own reserves.
Hien said the national reserves, meant for use when supply falls, have never been used since they was established.
She added that for now their use are not meant to stabilize retail prices, but the ministry is considering establishing such mechanism.
The ministry has continued to assure that fuel price rise in the country has been less than in many others.
They have only risen by 24-62 percent while prices in Singapore, which Vietnam often uses as a benchmark, have risen by 41-84 percent since the beginning of this year, Le Viet Nga, deputy head of the ministry’s domestic market department, said.
This is because Vietnam has used its fuel stabilization fund and cut environmental tax on gasoline by half, she added.
The ministry has proposed scrapping the tax altogether to bring prices down further.
Source: VnExpress
