Fuel giants lose millions to coronavirus crisis

By Dat Nguyen April 7, 2020 | 02:00 am PT

An employee holds a fuel nozzle at a gas station in Long Bien District, Hanoi. Photo by VnExpress/Thai Anh.

Fuel giants Petrovietnam and Petrolimex are posting huge losses as the coronavirus pandemic slashes oil prices following lower transport demand.

State-owned oil producer PetroVietnam’s after-tax profit in the first quarter dropped by half to VND4.4 trillion ($189 million), according to a recent report by the Commission for Management of State Capital at Enterprises (CMSC).

As global oil prices have fallen by 60 percent because of the disease, the company could lose up to VND141 trillion ($6 billion) in revenue this year, it estimated.

Its subsidiary Binh Son Refining and Petrochemical Jsc (BSR) has also been struggling as domestic fuel demand dwindles, leading to a loss of VND228 billion ($9.8 million) in the first two months this year.

The company also plans to close down the Dung Quat Oil Refinery in the central province of Quang Ngai as oil inventory occupies up to 90 percent of its storage space.

Competitor Petrolimex, a fuel distributor with thousands of stations nationwide, has also seen Q1 losses mount to VND572 billion ($24 million).

Its revenue could drop by VND12.5 trillion ($536 million) for the whole year as airlines and shipping firms have ceased most of their operations.

The CMSC, which manages the state capital in 19 state-owned enterprises, has proposed that the export tax is lowered so Petrovietnam could distribute its high inventory.

It also suggested tax breaks and extension of tax payment deadlines for these companies, along with low-interest credit from commercial banks as pandemic impact mitigating measures.