WTI crude oil delivered in May just dropped to negative levels for the first time in history.
Mr. Nguyen Viet Son – Director of the Department of Petroleum and Coal (Ministry of Industry and Trade) said that the price of imported gasoline that Vietnam is selling is anchored to the price of Brent oil, not WTI oil.
`Vietnam exploits and sells crude oil, does not import crude oil for retail, but only has a few factories importing crude oil for refining,` Mr. Son explained.
Petroleum storage of Vietnam Oil Corporation (PVOil).
Meanwhile, the leader of the Domestic Market Department (Ministry of Industry and Trade) further explained that Vietnam currently imports finished petroleum products at reference prices from the Singapore market – the main import market, so it is not much affected by
In addition, retail gasoline prices are governed according to Decree 83 with a mechanism to calculate the average base price over 15 days.
However, this person believes that the world’s general downward price trend will also have a positive impact on domestic gasoline retail prices.
Commenting on this reality, Dr. Le Dang Doanh – former Director of the Central Institute of Economic Management (CIEM) said that if oil prices are so low, it will be difficult to immediately return to the same high level as before.
Therefore, the operator needs to calculate options and tools through setting up a Fund to stabilize gasoline prices at a reasonable level, bringing domestic retail prices down commensurate with world prices, avoiding too large price fluctuations.
This will be an opportunity to stimulate demand, reduce the burden of inventory for key businesses, and reduce the price burden for those directly affected such as transport businesses, people…
At the price management steering committee meeting today (April 21), Prime Minister Nguyen Xuan Phuc also commented that the price of crude oil on the New York exchange has dropped to negative levels, and the risk of increasing prices of this commodity this year remains.
`Do not let domestic gasoline prices affect production and business and the price level in general,` the Prime Minister emphasized.
In addition to further reductions in retail prices, according to experts, this is a good opportunity to consider buying crude oil.
The scenario of buying crude oil and petroleum products to wait for the market to warm up was considered and proposed by PVN when oil prices were at 20 USD per barrel.
Mr. Tran Viet Ngai – Chairman of the Vietnam Energy Association (VEA) said he will ask the Prime Minister and ministries to let businesses make the most of the capacity of existing warehouses and tanks to increase crude oil imports,
Agreeing with this plan, but Dr. Le Dang Doanh – former Director of the Central Institute for Economic Management (CIEM) noted that market fluctuations are very unpredictable, accurate predictions are needed to avoid losses.
Mr. Ngo Tri Long said that petroleum importing businesses need to evaluate if they import oil, how much storage capacity the warehouse will have, and how long the oil price reduction will last.
Meanwhile, according to an energy expert, the option of buying crude oil reserves can be a solution to help businesses balance their financial problems while avoiding exploiting crude oil at high prices while selling at low prices.
Not to mention the capital resources and storage of the business are also problems.
At this time, according to the leader of the Department of Petroleum and Coal, the parties need to help each other overcome difficulties.
