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Policy changes needed for refineries to keep high capacity – Economy – Vietnam News | Politics, Business, Economy, Society, Life, Sports

by fastnewz

The Dung Quat Refinery in central Quảng Ngãi Province. VNA/VNS Photograph Đăng Lâm

HÀ NỘI — There was growing stress on refineries to extend manufacturing as petrol costs continued to spike in current months, in accordance with Bùi Ngọc Dương, director-general of Bình Sơn Refining and Petrochemical JSC (BSR), which runs one of many nation’s largest refineries, the Dung Quất Refinery.

The refinery accounted for over 30 per cent of Việt Nam’s petrol demand because the starting of the 12 months.

Dương mentioned the refinery had been operating at 109-112 per cent capability throughout April and Could to fulfill market demand. It is impossible that the refinery can ramp up manufacturing capability any farther from now till the tip of the 12 months attributable to security considerations.

Based on the Ministry of Trade and Commerce, the nation’s demand for petrol merchandise within the second quarter of 2022 was estimated at 5.2 million cubic metres and 20.6 million cubic metres for the complete 12 months.

Rising international oil costs, logistics prices and China’s restricted export of petrol merchandise have contributed to increased petrol costs in Việt Nam since February.

To make issues worse, the Nghi Sơn Refinery has been struggling to run at full capability, which ought to cowl 40 per cent of the nation’s demand, attributable to varied technical and monetary points.

In the meantime, provide through the second quarter was estimated at 6.7 million cubic metres, with 1.8 million coming from Nghi Sơn Refinery, 1.9 million from Dung Quất Refinery, 1.5 million from imports and 1.5 million from storage. The ministry forecast that provide must be ample for the second quarter, with some extra for the following quarter’s planning.

To cope with any shortfall in home manufacturing, petrol merchants had been instructed to import an extra 800,000 cubic metres monthly or 2.4 million for a complete quarter.

Merchants, nonetheless, have been voicing considerations over a number of difficulties in importing oil, together with delivery prices, provide chain dangers and lengthy transport, which usually takes 46-60 days, from the US.

Chairman of BSR Nguyễn Văn Hội mentioned it will be difficult to make sure provide for Dung Quất Refinery. At present, the refinery depends on home provide for 70-80 per cent of its enter, with the remainder being imported.

As well as, enter value has steadily elevated over time. For instance, BSR used to pay US$1.5-2 in a surcharge per barrel earlier than 2019. The refinery paid $3-4 in 2020-21 and is at present paying $5-6 per barrel for a similar surcharge.

They requested the Authorities to take away taxes on intermediate use through the refining course of, which is being taxed at 5 per cent now, whereas crude oil enjoys a 0 per cent import tax.

“In essence, intermediate use is assessed as an enter, not not like crude oil,” Dương mentioned.

BSR’s administration has additionally known as on the Petrovietnam and the Authorities to prioritise provide for the refinery earlier than exporting to make sure the refinery can keep at excessive capability to raised meet home demand. — VNS

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