A view of the Binh Son Refinery and Petrochemical JSC located in the central province of Quang Ngai (Photo: VNA) The centralprovince's report to the Government said as the country attempts to contain thenovel coronavirus in its fourth outbreak (since late April) major cities andtowns across the country including the capital city of Hanoi and the southernlargest economic hub Ho Chi Minh City, have one after another, gone into lockdown.This has sent domestic demand for gas and oil nose-diving at least until theend of the year.
The suddenfall in demand has made traders stop buying gas and oil. In July alone,deliveries for some 230,000cu.m of gas and oil have been either delayed orcancelled, which has caused BSR's inventories to balloon rapidly within ashort period of time. As of now, the refinery is holding onto over 200,000cu.m,or 1.2 million barrels, of petrol products and nearly 400,000cu.m, or 2.4million barrels, of crude oil.
To make matterworse, deliveries for August have also been forecast to drop by 40-50 percentas many traders have not made plans with BSR for their purchases.
Since August3, the refinery has been forced to operate at 90 percent capacity, its minimumtechnical efficiency. BSR has also been forced to send 25,000cu.m ofgasoline into storage and expected to make room for another100,000-120,000cu.m of products in August. This, however, only offered atemporary measure as storage space has been snatched up fast. Once it runsout of storage, the refinery will have no choice but to shutter operations,which will incur huge costs for the enterprise, said the report.
Anotherrefinery, the Nghi Son Refinery in Thanh Hoa province, has been reportedly dealingwith the same problem.
Meanwhile, thecountry's import of petroleum products still remained high, making it even moredifficult for domestic refineries to find a way out. Vietnam will likley finditself with a large surplus in supply in the coming months across all of itscities and provinces, said the report.
BSR, however,has been reportedly doing well during the first six months of the year. Therefinery reported net revenue of 27.8 trillion VND (1.2 billion USD) during thesecond quarter of 2021, and after-tax profit of 1.7 trillion VND,despite rising operational costs across the board, a stark contrast toperformance during the same period last year when BSR reported 1.9 trillion VNDin losses./.
VNA
