Ho Chi Minh City chairman urges gov’t to stockpile oil amid slumping prices
Ho Chi Minh City chairman urges gov’t to stockpile oil amid slumping prices
Vietnam’s government should consider stockpiling more crude oil in case the global oil situation worsens, Le Hoang Quan, Chairman of Ho Chi Minh City proposed Monday.
Oil dropped to around US$52 a barrel on Monday morning, while the domestic gold price rose to VND35 million ($1,647) a tael (37.5 grams), two factors that need to be closely watched, Chairman Quan said during an online meeting between the central government and localities countrywide.
“We suggest the government buy more oil for reserves,” he said, adding “this is an important chance.”
“We can suspend or reduce crude oil exploration and production and stockpile oil along with foreign exchange reserves, as oil is a very important material for production,” he concluded.
Minister of Planning and Investment Bui Quang Vinh has said the slumping global oil price is a double whammy to the national economy.
Crude oil fetches around $35-37 a barrel at oil fields in the Southeast Asian country, and the current price plunge does not affect exploration plans even though it has reduced profits, Vinh said.
“In the medium and long terms, the slumping global oil price has a positive impact as it helps lower domestic fuel prices, shrink input and production costs, boost consumption and manufacturing, and lessen the economy’s reliance on oil,” he said.
Fuel prices in Vietnam have been repeatedly cut following the global oil price fall.
On December 22, in what could well be the last fuel price adjustment of the year, A92 gasoline, the most popular type of petrol in the country, dropped VND2,050 a liter to a record low VND17,880 a liter.
Vietnam has adjusted fuel prices 12 times this year, with 12 cuts in a row from July 18.
On the other hand, many Vietnamese stock market magnates have suffered severely from the free fall of the local stock market, a knock-on effect from the recent slump in oil prices.
Doan Nguyen Duc, chairman of Hoang Anh Gia Lai Group, had lost about VND374 billion ($1.76 million) by the end of Wednesday last week when HAG shares fell VND1,200 to VND21,100 per share ($1).
