As Vietnam’s domestic fuel demand falls due to the measures to restrict the spread of coronavirus, state-owned PetroVietnam warned that local refineries are at risk of shutting down due to the filled up storages.
Vietnam’s two domestic refineries, the 145,000 bpd Dung Quat and 200,000 bpd Nghi Son are supposed to supply about 70-80% of domestic fuel consumption.
However, the operations are at risk because buyers of products have been canceling and deferring cargoes due to the lack of local demand. Inventories have soared to a high level, according to PetroVietnam.
The continued oil products’ imports are aggravating the problem. In the January and February period, Vietnam imported 1.3 million tons of products despite the slump in demand. Meanwhile, in the same period, the Dung Quat and Nghi Son refineries produced around 2.16 million tons of oil products.
Even so, the country’s imports of oil products have all declined year-on-year. Gasoline imports were 240,000 barrels, gasoil 817,000 barrels, and jet fuel 600,000 barrels. All were down by 82%, 22%, and 8% from the same period last year.
PetroVietnam estimated gasoline demand in this year’s first three months to fall by 30% due to the nationwide social distancing exercise started April 1 for 15 days. If the situation fails to improve, more demand decline is a possibility.
