Ministry calls for revamp of Vietnam's outdated infrastructure


The Industry and Trade Ministry said that it is necessary to issue standards and costs for the national petroleum reserves. — Vietnam News

HANOI: The Industry and Trade Ministry is proposing the managing of the national petroleum reserve to the Finance Ministry in order to unify the management of reserves of essential goods into a single ministry.

The proposal was raised in the ministry’s report about the national petroleum reserve.

Under the Law on National Reserve, the Finance Ministry is directly in charge of managing reserves of essential goods, such as rice.

As petroleum is also an essential good, the Industry and Trade Ministry said the management should be transferred to the Finance Ministry in the 2024 to 2025 period.

In Vietnam, petroleum reserves are kept in two forms: reserve by businesses and the national reserve.

However, it was difficult to separate the national petroleum reserve from the reserve of companies because the state did not have the infrastructure for petroleum reserves and rents it from firms.

The four companies that lease the infrastructure for national reserve storage are the Vietnam National Petroleum Group (Petrolimex), PetroVietnam Oil Corp, Dong Thap Petroleum Trading Import Export Co Ltd and Petrolimex Aviation.

The Industry and Trade Ministry said: “There are a number of difficulties in the management of the national petroleum reserve, including low maintenance costs of 14,900 dong per cubic metre, which has been kept unchanged for the past two decades.”

The actual cost is around 75,000 dong to 150,000 dong per cubic metre.

This has caused a shortage of resources for investing in infrastructure for petroleum reserves, the ministry said.

In addition, the Finance Ministry has not issued the criteria for the national reserve of petroleum products, which has also caused difficulties in management.

“The legal framework for the management of the national petroleum reserve remains inadequate and lacks consistency,” the Industry and Trade Ministry said.

At the end of 2022, the national petroleum reserve stood at 361,125 cubic metres, 55% of which was diesel, 27% petrol Ron 92, and the rest mazut oil and Jet A1, equivalent to seven days of net import.

Vietnam’s total petroleum reserve is estimated at around 65 days of net import, much lower than demand.

The ministry proposed the national petroleum reserve be raised to 20 days of net import by 2030, including crude oil, or at least 15 days of net import.

It also proposed the national petroleum reserve be raised from nine days of net import to 15 days and 30 days in the 2026 to 2030 period.

To achieve the goal, the Industry and Trade Ministry said that it is necessary to issue standards and costs for the national petroleum reserve.

“In addition to this, investment in storage infrastructure should be sped up’” the ministry added.

It was previously estimated that Vietnam would need around 4.1 trillion dong per year to increase the national petroleum reserve. — Viet Nam News/ANN

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