Vietnam needs $11.5B to upgrade national fuel reserves

By Anh Minh   March 31, 2023 | 04:54 pm PT
Vietnam needs $11.5B to upgrade national fuel reserves
An employee pumps gasoline into a motorbike in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
Vietnam needs VND270 trillion ($11.5 billion) to upgrade its national fuel reserves by 2030 as the current capacity is considered thin and could lead to shortages.

Currently the country has to use storage units at fuel distributors to store the national fuel reserves and the capacity amounts to nine days of net imports, according to a recent report by the Ministry of Industry and Trade.

If circulating fuel and manufactured fuel are taken into account, the reserve is at 65 days of net imports.

There is also limited storage for liquefied petroleum gas with just 10 units, each from 10,000 cubic meters.

There is no liquefied natural gas storage in operation.

The construction of new pipes to connect storage with consumers is challenging as there was no prior plan.

The ministry wants to increase the country’s national reserves to 75-80 days of net imports by 2030 and 90 days by 2050.

It also wants the gas reserve to reach 15 days of consumption.

The price tag for the project is estimated to be VND270 trillion, which will mostly come from private investors.

In a comment on the proposal, Bui Ngoc Bao, chairman of the Vietnam Petroleum Association (VINPA), said that the upgrade plan should be flexible depending on the country’s energy needs and not be "locked" into a theoretical estimate.

Nguyen Anh Duc, head of the Vietnam Petroleum Institute, said that in building the plan Vietnam needs to take into account the commitment to achieve net zero emissions in the coming decades.

Deputy Prime Minister Tran Hong Ha said that the Ministry of Industry and Trade needs to ensure that the storage plan accounts for possible fluctuations in the fuel market and that it should not make the plan entirely dependent on either the government or business.

Businesses’ storage should serve their operations, while the national reserve should be used for emergencies, he added.

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