Vietnam must invest in building larger fuel reserves

A fuel truck during refuelling at a gas station in Hanoi. (Photo: VNA)

Hanoi (VNS/VNA) - Vietnam must invest to raise its fuelreserve capacity, said economists and policymakers during a conference on April12 discussing how to encourage investment from the private sector in fuelinfrastructure and to stabilise fuel supply and demand.

According to Luu Binh Nhuong, deputy head of the Ombudsman Board under theNational Assembly Standing Committee, Vietnam cannot afford to have its fuelsupply disrupted.

He said the country currently has more than five million cars; 42.8 millionmotorbikes and 857,000 businesses, on top of thousands of construction projectsand other land and water vehicles, consuming a massive amount of fuel each day.

Nhuong said the economy could come to a standstill if the fuel supplywas disrupted severely.

"Without a strategic vision and preparation, there will be times thesystem can no longer cope with demand," he added.

A government report showed the country spent over 9 billion USD to import fuelin 2022, which covered roughly 70% of domestic demand. In order to maintain andspeed up economic growth in the future, a larger amount is likely required.

He stressed the importance of building a strong fuel reserve, citing examplesof the US, China and India which hold, on a regular basis, millions of barrelsin reserve to ensure ample supply for industries.

Nguyen Hoang Giang, deputy head of the financial planning department under theMinistry of Industry and Trade (MoIT), said economic development requiresenergy consumption, especially fuel, which is a strategic commodity that playsa crucial role in almost all economic sectors.

A fuel reserve could serve as a blood bank to ensure supply during emergencies.

Last year's fuel disruption that saw numerous fuel stations across the countrybeing closed down due to lack of supply clearly showed a lack of preparationand planning, as well as subpar fuel infrastructure.

Nguyen Duc Hanh, chairman of Son Hai Petroleum Corp., said his company has beenseeking capital for a fuel reserve of 40,000 cubic metres worth 500 billion VND sincelast year. So far, he has not been able to convince any commercial banks for aloan.

"It's high time for a fuel reserve law to be promulgated," he said.

Hanh said it's extremely challenging for private businesses to fund fuelreserve infrastructure as they often require large capital resources.

He called for stronger governmental financial support and policies to helpbusinesses access funding in the future./.

VNA