Viet Nam National Petroleum Corporation (Petrolimex) yesterday announced a loss of VND2.6 trillion (US$123.81 million) in the first quarter mainly due to exchange rate risks.

Since the State Bank of Viet Nam depreciated the Vietnamese dong against the US dollar in February, the adjustment caused Petrolimex to lose VND1.83 trillion ($87.33 million), Petrolimex’s Deputy General Director Dam Thi Huyen told the meeting with the Ministry of Industry and Trade yesterday.

“When the central bank adds or trims the daily interbank rate by VND5-10, Petrolimex loses VND5-10 billion every day,” Huyen said.

“And the fuel price stabilisation fund has been in a VND703 billion ($33.47 million) deficit.”

The remainder of the loss came from attempts to ensure sufficient supply for the market, Huyen said.

Petrolimex - the biggest customer of Dung Quat Oil Refinery - would have a hard time ensuring a supply source, she added.

Minister of Industry and Trade Vu Huy Hoang told the meeting that although global petrol and oil prices had been raised twice in the first three months, domestic prices were still VND2,000 per litre lower than prices in neighbouring countries. Therefore, petrol and oil have been smuggled across the borders of Quang Ninh and Kien Giang provinces and Hai Phong City.

To balance demand for petrol and oil and to ease smuggling, the Central Steering Committee 127 this month would issue regulations on border trading that stipulate the opening and closing times for trading and in the types of containers petrol and oil may be sold.

Petrolimex’s Huyen suggested that the central bank ensure a supply of dollars to import petrol and oil and fix the exchange rate for the company’s loans at reasonable rates.

Dung Quat Oil Refinery, Viet Nam’s first facility of its kind, produced 1.27 million tonnes of petrol and oil in the first quarter. The 130,500 barrel-per-day (bpd) refinery plans to raise its product output to 9.2-9.3 million tonnes per year (around 200,000 bpd) from 6.0-6.2 million tonnes.

Source: VNA