Laos imports more fuels from Vietnam
Laos is now importing more fuels from Vietnam after an energy firm from a neigbouring country expanded its business operations in the country.
According to a report from Vietnamese Trade Counsellor in Laos, Mr Tran Bao Giam, one of the top goods which Vietnam exports to Laos is petroleum. Over a 10 month period in 2013, Vietnam exported US$82 million worth of goods to Laos.
The import value of fuel from Vietnam has seen a big surge over the past few years. Data from the Lao Ministry of Industry and Commerce showed that Laos imported only US$640,000 worth of petroleum and gas in the 2010/2011 fiscal year.
In the same fiscal year, Laos imported 750 million litres of fuel, most of which came from Thailand. In 2012, Laos imported about 800 million litres of fuel, costing the country more than US$550 million.
The increasing import value of p etroleum from Vietnam was made possible after Petro Vietnam expanded its fuel distribution and retail businesses in Laos.
Petro Vietnam Oil (PV Oil), a Vietnam state-owned oil company, bought the Lao retail unit of Royal Dutch Shell in 2010, creating conditions for the Vietnamese energy firm to import more fuel from Viet nam.
Several years ago, Lao and Malaysian firms eyed the possibility of constructing a fuel pipeline from central Vietnam to Laos so as they could import more fuel from the neighbouring country. So far there has been no report on the progress of the fuel pipeline construction study.
Officials said it was possible for Laos to construct a fuel pipeline from Vietnam as the move would reduce the cost of fuel transportation from Vietnam to Laos. At present, most of the Vietnamese fuel distributors supply fuel in border areas only and cannot supply fuel to major cities such as Vientiane due to the higher cost of transportation.
Observers say that once a planned high speed rail linking Savannakhet with the Vietnamese border is complete Laos could import more fuel from Vietnam, as there are many Vietnamese companies doing business in Laos.
Laos and Vietnam also enjoy good political and economic cooperation. The two countries will strive for a 20 percent growth in two-way trade next year, up from the US$1 billion expected for the year ending this month.
Two-way trade between Laos and Vietnam over the first 10 months of 2013 reached US$817 million, up by 13 percent compared to the same period last year.
In addition, Vietnamese enterprises have invested in 412 projects in Laos totalling US$5 billion, which ranks the country second after China.
Since early this year, the Lao government has approved 12 projects for investors from neighbouring Vietnam to do business in the country, according to information from the Laos-Vietnam commission.