VietNamNet Bridge – Idemitsui Q8 Petroleum Co Ltd will become the first foreign joint venture to distribute fuels in Vietnam as it has finalized procedures to open its first gas station in the nation.

A gas station of Japanese firm Idemitsu. The company will establish the first wholly foreign-owned company in the oil product distribution and retail sectors in Viet Nam. — Photo dnp.co.jp

The 25th fuel distributor in the country will have its first gas station located in the Noi Bai International Airport area in Hanoi City six months after the joint venture between Japan’s Idemitsui Kosan and Kuwait Petroleum International Ltd got a license.

Vietnam has allowed the 100% foreign-owned business to join the domestic fuel retail market though the nation does not have to open its fuel market to foreign investors under its commitments to the World Trade Organization (WTO).

Idemitsui Q8 will sell imported fuel products in the initial phase and products of Nghi Son Oil Refinery from mid-2017. Idemitsui Kosan and Kuwait Petroleum International hold a 35.1% stake in the oil refinery project in Nghi Son Economic Zone in the north-central province of Thanh Hoa.

Idemitsui Q8 got approval to sell fuels in Vietnam as the Government pledged to allow shareholders of Nghi Son oil and petrochemical complex to distribute its products in Vietnam. Joint ventures can export products when they are in the pre-marketing process, depending on their licenses.

Idemitsui Q8 plans to open 10 gas stations in the coming years. Meanwhile, Nghi Son Oil Refinery and Petrochemical Co Ltd is expected to sell products from mid-2017.

However, products of the refinery do not fully meet the Vietnam Standard and Quality Institute’s standard levels 4 and 5, equivalent to European emissions standards Euro 4 and Euro 5, as per the Government’s Decision No. 49/2011 on a road map for emissions reductions.

According to the road map, Euro 4 will be applied from January 1 next year and Euro 5 from January 1, 2022. These are among the national standards for gasoline, diesel and bio-fuel, and they will help improve the competitiveness of local products as regional countries have applied the standards.

Dung Quat Oil Refinery has seen its sales declining as imports have an edge over its products thanks to their lower import tariffs.

SGT