Oil price slide to cost Vietnam $47mn: ministry
Oil price slide to cost Vietnam $47mn: ministry
Vietnam is likely to see a VND1 trillion (US$47.07 million) loss as an oil-exporting country this year thanks to the continued weakening of oil prices, the finance ministry said Monday.
The loss, however, is not significant as the disparity between the current oil price and the rate Vietnam anticipated in its budget plan for 2014 is modest, a ministry spokesperson told Tuoi Tre (Youth) newspaper.
The Southeast Asian country developed its budget plan based on an average oil price of $110 a barrel, and this year’s 11-month average oil price is $109 a barrel.
“The $1 disparity only results in a loss of around VND1 trillion,” the ministry official said.
In the meantime, Minister Nguyen Van Nen, chairman of the Government Office, told reporters in Hanoi the same day that the budget estimates for 2014 are based on an oil price of $100 a barrel.
“If oil price slides below $80 a barrel, the budget collection will lose around VND20 trillion ($941.35 million),” Nen said.
Oil prices have dropped 38 percent this year, according to Bloomberg.
Brent Crude, a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide, was down $1.40 at $68.75 as of 9:14 am on Monday in London, while New York oil fell $1.47 to $64.68.
Brent is now at its lowest point since the financial crisis – when it bottomed around $36, according to Bloomberg.
The Financial Post quoted Canadian Natural Resources Ltd. chairman Murray Edwards as saying crude may sink as low as $30 a barrel before rebounding to stabilize at $70 to $75 a barrel.
The Vietnamese finance ministry said it will continue watching global oil price development closely.
If the oil price falls to and remains at low rates, the ministry will have to develop scenarios for the situation and report to the government.
If the situation gets even worse, the ministry will have to report to the National Assembly, it said.
Consumers benefit
Vietnam exports some 340,000 barrels of oil a day, ranking 36th among the world’s oil-exporting countries, Dien Dan Dau Tu (Investment Forum) newspaper reported on Sunday, citing customs data.
The average export price of oil in the first two weeks of last month was $91 a barrel, down 30 percent compared to the $129 a barrel in July, according to the Vietnam Customs.
The Southeast Asian nation exported 7.94 million tons of crude oil in the Jan-Nov period, raking in $6.5 billion. Last year the country’s oil exports reached 8.4 million tons and $7.2 billion in revenue.
It also imported a huge amount of fuel products, especially petrol, to meet domestic demand.
Vietnamese fuel prices thus dropped along with the slumping oil prices, which economic expert Ngo Tri Long said helps reduce input costs for businesses.
“They are thus likely to enjoy better business results and bigger profits, and will contribute to the state budget via taxes,” he said.
