The Vietnam National Oil and Gas Group is seeking the prime minister's approval to restrict the import of petroleum products to protect local refineries.
The group that trades under the more commonly known PetroVietnam name has submitted a report on difficulties to ensure a market for Nghi Son Oil Refinery's products.
Dung Quat Oil Refinery
According to the group, the refinery is scheduled to start operations in 2017 and reach its top designed output in 2018. At that time, total supply of petroleum products for the local market may reach 17.6 million cubic metres, including 7.3 million cubic metres from Dung Quat Refinery; 9.7 cubic metres from Nghi Son and the remainder from the four condensate processing facilities.
The domestic total demand for petroleum products in 2018 will be at 17.4 million cubic metres, lower than the total the total supply of 17.6 million cubic metres. Meanwhile, from now to 2018, a number of petroleum products may become operational, which will also help to boost the supply.
PetroVietnam is worried that due to the free trade agreements, petrol traders will be offered preferential import tariffs, so they will sell their imported products at lower prices than those produced by local oil refineries. PetroVietnam however has failed to clearly explain how petrol products produced within Vietnam and not subject to any import levies or transport costs could be more expensive that imported alternatives.
PetroVietnam has pleaded for protectionist measures which run largely contrary to the government’s expressed opinions on increasing its global economic integration and increasing competition in a more liberalised domestic market.
The group specified that the government should only provide import quotas for petroleum products when the consumption of all locally-made products is ensured.
