The State Bank of Vietnam (SBV) has issued a document instructing commercial banks to take all measures to support fuel traders.

SBV stressed the importance of fuel as a key commodity with direct and significant influence on the country's macro-economic stability and people's everyday lives, said the document.

Since the beginning of the year, SBV has been working closely with commercial banks to extend credit lines for fuel traders and to grant them favourable exchange rates.

As the global oil price continued to be volatile and the market facing disrupted supply, the Government of Vietnam has made it a high priority to ensure a stable supply for the domestic market.

The central bank was to implement financial support policies to best support fuel traders in accordance with existing regulations. Traders were advised to stay in close contact with commercial banks to plan ahead for their financial needs.

Meanwhile, the banks were to conduct comprehensive reviews to stay on top of the situation with an objective to streamline the process to make sure traders' financial needs are met in a timely manner.

The central bank expects monthly reports from commercial banks on how and when they plan to support traders, including both retailers and importers who were encouraged to report to the SBV should they experience issues or delays.

During a discussion at the National Assembly, Minister of Industry and Trade Nguyen Hong Dien said support from the central bank was to play a crucial role in boosting traders' financial capacity and easing the ongoing fuel shortage across the country.

The National Assembly (NA) has tasked Dien and his ministry with coming up with a plan to establish a stable supply of fuel and to efficiently operate the country's fuel network.

Earlier last month, Minister of Finance Ho Duc Phoc proposed giving the Ministry of Industry and Trade (MoIT) full authority to adjust fuel prices, instead of the current joint authority between MoIT and the Ministry of Finance. Phoc said it would help streamline procedures and increase efficiency in fuel management.

Some industry experts voiced their support for the minister's proposal, saying it may put an end to the blame trading recently between the two ministries. In addition, MoIT which currently oversees fuel trading and retail activities was in a much better position to come up with a price adjustment mechanism that balances the rights and benefits of traders and consumers.

Fuel selling in many Northern regions just in small amounts

The situation of gas selling in small amounts not only in Hanoi but in other Northern provinces (Bac Ninh, Bac Giang, Hoa Binh, Son La, Lao Cai) for the last 3 days is due to both supply shortage and a wait of sellers for possible retailed price rise.

It is not at all hard to spot certain people standing in long lines at gas stations in the provinces of Son La, Lao Cai. Along National Highway No.1A, fuel stations only sell petrol for a limit of VND50,000 (US$2.01) per scooter and VND300,000 ($12.06) per car.

It is said that sellers are waiting for the time the Ministry of Industry and Trade and the Ministry of Finance announce the latest fuel price adjustment this afternoon.

The Industry and Trade Department of Lao Cai informed that out of 88 gas stations in the province, 8 reported merchandise shortage and stopped selling petrol. However, after checking, the provincial Market Management Authority discovered that 3 stations violated fuel trading regulations and imposed an administrative fine of VND150 million ($6,033), along with a request to submit more than VND456 million ($18,300) of illegal profit.

Chairman of Vietnam Petroleum Association (VPA) Bui Ngoc Bao stated that the current fuel shortage is common in the world, and it could be worse in the upcoming time. Therefore, sufficient petroleum import is truly a tough challenge.

The first reason for this situation is because businesses in the field find it harder to access the supply. Adding to that is a higher import premium of up to $11-12 a barrel, a record high for the last 10 years.

Another factor negatively affecting fuel import is dissimilar import tax rates among import regions and markets. In compliance with the Agreement of ASEAN Free Trade Area (AFTA), the import tax rates for petrol and oil are 8 percent and zero percent, respectively.

Meanwhile, according to the tax mechanism of Most Favoured Nation (MFN), even though the Government reduced the import tax rate for unleaded motor gasoline from 20 percent to 10 percent this August, it is still 2 percent higher the rate of imports from ASEAN countries. The MFN’s import tax rate for oil is still as high as 8 percent, compared to zero percent of AFTA. Obviously, businesses favor to buy fuel from ASEAN nations, yet the supply here is not too surplus.

VPA forecasts that in the near future, Vietnam still encounters inconveniences in buying and selling fuel like other countries in the world, but at least the supply is still guaranteed.

It is, therefore, advisable to implement synchronous measures like addressing specific problems of fuel businesses so that they can follow the schedule of distributing petroleum amounts assigned by the Industry and Trade Ministry; reviewing and adjusting the base price formula for imported goods; logically rearranging the gas supply system when the market is more stable.

In related news, the departments of Transport – Industry and Trade – Traffic Police yesterday sent a proposal to ask Hanoi People’s Committee to allow gas-tank trucks of 10 tonnes and above to operate round the clock in 3 months at most. When the permit expires, those in need can request an extension.

Fuel firms continue grappling with import woes

A tight oil supply caused by Western sanctions against Russian exports and a surging demand for oil products of the EU have been blamed for Vietnam’s ongoing fuel shortages.

The Vietnam Petroleum Association said it is increasingly difficult to import fuels, worsening gasoline shortages in the country and forcing many gas stations to suspend their operations. 

The scarce supply has driven up fuel prices. According to the association, oil prices under premium import agreements have soared to US$11-12 per barrel, the highest in a decade.

Another factor impacting oil imports is the difference in tariffs on oil products among countries.

In Southeast Asian countries, import-export tariffs were 8% for gasoline and 0% for diesel oil under the ASEAN Free Trade Area.

Meanwhile, the economies following the most favored nation principle imposed a 10% duty on gasoline and 8% on diesel oil. 

The differences lead petroleum companies to buy fuels from Southeast Asian nations, making the demand for the product in the region soar and outstrip the supply.

Vietnam’s two oil refineries now can meet 80% of the domestic fuel demand, so the remaining 20% is imported.

RCEP to help boost Vietnam’s engagement in supply chains: Report

A report on the Regional Comprehensive Economic Partnership (RCEP)’s impacts on the shaping of supply chains in Vietnam was released by the National Centre for Socio-Economic Information and Forecast (NCIF) and Konrad-Adenauer-Stiftung Vietnam on November 10.

Luong Van Khoi, Deputy Director of the NCIF under the Ministry of Planning and Investment, cited the report as saying that the RCEP will generate many positive impacts on regional economies, helping raise the region’s income by some 0.6% by 2030, equivalent to 245 billion USD each year, and create 2.8 million jobs annually.

Recent studies also pointed out that Vietnam will benefit much from this agreement, he said, elaborating that the World Bank forecast the country’s GDP will increase by about 4.9% and exports 11.4% by 2030.

Apart from the commitments of a traditional free trade agreement (FTA), the RCEP also includes those on e-commerce, telecommunications, competition, small- and medium-sized enterprises (SMEs), and public procurement, among others.

The most important thing may be the harmonisation of rules of origin, which enables the accumulation of origin, creating many chances and benefits for intra-bloc exports, Khoi noted.

The report said due the FTAs previously signed among many member countries, some groups of commodities like electronic components, textiles and garments among RCEP members have already benefited from very low tariffs, so this deal’s impacts are inconsiderable.

However, tariffs have been reduced for some goods whose supply chains Vietnam has engaged deeply into such as textiles, garments, automobiles, and some electronic products. The application of consistent rules of origin under the RCEP will help the country boost its participation in regional supply chains.

The shift of supply chains to Vietnam that has already been taking place thanks to bilateral FTAs or within the ASEAN Plus 6 framework will be further promoted by the RCEP. Foreign direct investment (FDI) inflows are also expected to grow even more when major investors in the region are stepping up specialisation to develop supply chains, according to the report.

It also pointed out that the RCEP will provide opportunities for Vietnam to improve added value and productivity by boosting market expansion, attracting investment to upstream manufacturing sectors, and enhance specialisation in the industries where Vietnam has strengths. That will in turn attract more FDI under supply chains to the country and help domestic enterprises further engage in global chains.

The RCEP was signed in 2020 between the Association of Southeast Asian Nations (ASEAN) and five partners, namely Australia, New Zealand, China, Japan, and the Republic of Korea. Taking effect since January 1, 2022, it is the largest FTA at present, covering 30% of the global GDP. Under this agreement, about 90% of the tariff lines will be eliminated within 20 years since it came into force.

Thanh Hoa proposes building new terminal at Tho Xuan airport

The People’s Committee of the north central province of Thanh Hoa has submitted an official dispatch to the Ministry of Transport regarding the investment of the T2 passenger terminal and other infrastructure at the local Tho Xuan airport.

Per the official document, the province asked the Ministry of Transport to consider attracting capable businesses and investors or arrange other lawful capital sources from the state budget for the construction of the terminal and infrastructure in the 2022-2025 period.

Earlier, the locality received a notice from the Airports Corporation of Vietnam (ACV), which is managing and operating the Tho Xuan airport. The report said the investment project worth some 2.12 trillion VND (90.83 million USD) is not included in its medium-term public investment plan for the 2021-2025 period, but has been earmarked for investment after 2025. According to the project, the T2 terminal is designed to be capable of serving 5 million passengers a year.

The Ministry of Transport’s Decision No. 1136/QĐ-BGTVT dated June 12, 2020, approved a plan for the airport for the 2021 – 2030 period with a vision to 2050. The plan stipulated that the 10-year period will see the expansion and upgrade of the existing passenger terminal T1, and the construction of the T2 and a cargo terminal, with a handling capacity of 27,000 tonnes per year.  

Currently, terminal T1 is overloaded as it struggles to handle domestic routes. The terminal is not designed to handle international routes as there is no isolation area for international arrivals, entry, exit, or customs management areas.

Investment in building the T2 terminal and other infrastructure as approved for the 2021-2025 period is timely to help the Tho Xuan airport to develop, said the provincial People’s Committee. 

Vietravel Airlines to put tickets of Vietnam-Thailand flights for sale

Vietravel Airlines will officially begin the sale of commercial tickets for Hanoi/Ho Chi Minh City - Bangkok (Thailand) routes from November 11.

On this occasion, many incentive programes and promotional tickets are offered, from only 66,000 VND (2.65 USD) per leg, excluding taxes, fees and surcharges.

Daily return flights on the Hanoi - Bangkok route are expected to start on December 16.

Vietnam remains world’s biggest pepper producer, exporter

Vietnam maintains its position as the world’s largest pepper producer and exporter, heard an international conference on the Vietnamese pepper sector held in the Central Highlands province of Dak Lak on November 9-10.

Addressing the event, Director of the Ministry of Industry and Trade’s Trade Promotion Agency Vu Ba Phu said that this year, Vietnam’s pepper export is estimated at 220,000 tonnes, accounting for 55% of the world’s total pepper output.

However, in order for Vietnam's pepper products to affirm their position in the world market in a sustainable way, the sector needs to conform to international standards, especially in aspects such as chemical residues, and socio-economic and environmental sustainable production criteria.

The sector also needs to apply technologies in production management, traceability and customer connection; re-orient the strategy of building the image and strengthening the presence in key markets; and have specific and effective strategies for developing new products in high-end markets, emphasised Phu.

Hoang Thi Lien, President of the Vietnam Pepper Association, said that the conference is an opportunity to connect buyers and sellers, and promote the image, people and potential of Dak Lak – Vietnam’s key pepper growing locality.

According to Lien, to ensure the value and sustainable development of the pepper sector, close cooperation between exporters, processors and producers is always needed.

Farmers must be placed at the centre and they themselves need to improve their farming knowledge, she noted.

More efforts needed to accelerate public investment disbursement: PM

Prime Minister Pham Minh Chinh on November 10 signed an official dispatch requiring all ministries, sectors and localities to speed up the disbursement of public investment in the remaining months of 2022 and the first months of the following year.

In the document, the Government leader noted that in the remaining months of this year, amidst more complicated developments of the world situation, the Vietnamese economy is forecast to face a lot of difficulties and challenges, especially in the financial and monetary market, and import-export activities.

To maintain the recovery momentum and gain an economic growth rate of about 8% in 2022, administrations at all levels and sectors need to focus on accelerating the disbursement of public investment, considering this as a driving force for growth and a key political task, thus contributing to promoting the effective coordination between fiscal, monetary and other macroeconomic policies, in order to stabilise the macro economy, control inflation, and promote growth in the last months.

This year, ministries, sectors and localities are determined to disburse 95-100% of public investment sourced from State budget. However, as of October 31, only 51.34% of the capital had been disbursed.

To achieve the set target, the Prime Minister asked for more drastic, concerted, prompt and effective measures, with a focus placed on settlement of site clearance, compensation and resettlement support in a timely and correct manner, ensuring compliance with the law, and harmonising the interests of the State and people.

Exports to EU set record high after two years of EVFTA implementation

The two years on from the implementation of the EU-Vietnam Free Trade Agreement (EVFTA), many Vietnamese export items have recorded impressive growth in the EU market.

The EVFTA has significantly contributed to boosting Vietnamese exports to partner markets in the EU, said Nguyen Cam Trang, deputy director of the Agency of Foreign Trade under the Ministry of Industry and Trade (MoIT), at a conference in Hanoi on November 10.

Some local export items which have recorded impressive growth over the past two years include iron and steel, up 739%, cameras and components, up 260%, and machines and equipment, up 82.3%, reported Trang.

Furthermore, the export of rice, bamboo, and rattan products rose by 50%, ceramic and porcelain products by 25%, and vegetables, electric wires and cables by 15%, she said.

Hoang Quang Phong, vice president of the Vietnam Chamber of Commerce and Industry (VCCI), said total export turnover from Vietnam to the EU between August 2020 and July 2022 reached US$83.4 billion, equal to US$41.7 billion per year on average, a figure 24% higher than the rate during 2016 to 2019 period.

According to Nguyen Thi Thu Trang, director of the World Trade Organization (WTO) Integration Centre under the VCCI, 41% of surveyed enterprises enjoy some benefits from the EVFTA, of which the most common benefit is from tariff preferences for import and export goods.

Trang noted that many Vietnamese export sectors have made effective use of the EVFTA since the trade deal came into effect I August 2020, she noted.

DFC loan supports women-owned enterprises through SeABank

The United States International Development Finance Corporation (DFC) has agreed to grant loan worth US$200 million through Southeast Asia Commercial Joint Stock Bank (SeABank) to support women-owned enterprises in Vietnam.

The loan will also be used to support small and medium-sized enterprises (SMEs), and to address the climate crisis, according to a loan agreement signed by the two financiers.

DFC's loan will help to enhance SeABank’s financial capability as it seeks to implement its planned projects, with a specific focus on addressing the credit gap for women-owned and women-led corporations, SMEs, and dealing with the difference between market demand and supply in the economy.

Credit surges 11.5% by end-October

Credit of the banking system by the end of October this year rose by 11.5% compared to the end of 2021, Bao Viet Securities Company (BVSC) said, citing data from the State Bank of Vietnam (SBV).

The monthly rate was the highest credit growth since 2018.

According to BVSC, if the SBV keeps its credit growth target at 14% for the whole year of 2022 as planned previously, credit will be allowed to expand by 2.5 percentage points in the last two months of this year.

BVSC forecast it is difficult for the SBV to extend the credit growth target to more than 14% this year, especially when inflation is posing higher risks with the consumer price index (CPI) in October recording 4.3%.

The SBV made the latest credit growth quota expansion for 15 banks in early September this year, of which Sacombank got a rise of 4%; Agribank, 3.5%; SHB, OCB and MBB, 3.2%; VIB, 3% and Vietcombank, 2.7%. It was the second time the SBV raised the credit cap for commercial banks in 2022.

The credit growth quota regime was officially deployed in 2011 when Vietnam’s economy was experiencing hyperinflation stemming from excessive money supply. The credit growth quota regime, putting a cap on the banking industry’s credit expansion, is often announced by the SBV at the beginning of each year.

Japanese firms establish joint venture for LNG project in Vietnam

Japanese companies Tokyo Gas and Marubeni have joined forces with Petrovietnam Power and local machine manufacturer Colavi to establish a joint venture for an LNG-to-power project in Vietnam.

The joint venture company Quang Ninh LNG Power JSC (QNLP) will conduct a feasibility study and a project development plan for the LNG to power project in the Cam Pha District of Quang Ninh Province after receiving an Investor Registration Certificate from the Vietnamese government on July 11.

The combined cycle gas-fired power plant will be the largest of its kind in Vietnam with a 1,500 MW generation capacity. It acts as an onshore LNG receiving, storage, and regasification facility for the Vietnam Electricity Group.

Once shareholders have made a final investment decision, QNLP will evaluate the economic and technological viability of the project with the goal of bringing it to full operation. The project is slated to be put into commercial operation in the second half of 2027.

HCMC awaits green light for Can Gio transshipment port project

A proposal to include the Can Gio international transshipment port project in the detailed planning for Group-4 seaports has been submitted many times, but there is still no response from the Transport Ministry, said a representative of the Saigon Port Joint Stock Company.

The Saigon Port representative said at a recent seminar on the master plan for seaport development that the tentative site in Can Gio is convenient for developing a major international transshipment port.

Upon the complaint, Nguyen Xuan Sang, Deputy Minister of Transport, said that the prime minister had approved the master plan before the ministry received the proposal for Can Gio.

The ministry will now have to wait for approval from the prime minister over the detailed planning of seaport groups and will then consider inserting the Can Gio seaport proposal to the detailed planning.

Saigon Port had earlier sent the HCMC government a US$6-billion project to develop Can Gio international transshipment port with a capacity three times higher than that of Cat Lai Port.

HCMC proposes three options for Beltway 4 direction

The HCMC Department of Transport has proposed three options for the direction of the Beltway No. 4 project in the city to reduce site clearance and construction costs.

The options have been sent to the HCMC People’s Committee for consideration after public-private partnership (PPP) has been chosen for the project.

The HCMC section of Beltway No. 4, around 17 kilometers long, will pass through Cu Chi and Nha Be districts, starting at Phu Thuan Bridge in neighboring Binh Duong Province and ending at Thay Cai Bridge in neighboring Long An Province.

Regarding the first option, the 17-kilometer section will be built according to the previous plan at a total cost of around VND17.8 trillion, with nearly VND10.7 trillion of it going to site clearance.

Vietnam’s first macadamia shipment sent to Japan

Krong Nang District in the Central Highlands province of Dak Lak transported a container of macadamia nuts to Japan on November 9, marking the first shipment of macadamia products from Vietnam to the Northeast Asian nation.

The six-ton shipment of more than 2,200 packets of dry-roasted macadamia nuts is part of an exclusive distribution arrangement between Nguyen Phuong Damaca JSC of Vietnam and Japan’s Olty Co., Ltd.

The macadamia products will be available on the shelves of 180 major supermarkets in Japan on December 1, according to Otsuka Tokuro, director of Otly Co. Ltd.

Otly intends to deliver its macadamia nuts to Japan’s largest food expo held in February 2023 and offer the product to retailers nationwide.

In 2003, coffee and macadamia were intercropped on four hectares in Krong Nang District. The macadamia growing area has been expanded to 2,363 hectares, with a total yield of 1,700 tons.

On average, farmers make some VND120 million per hectare from macadamia cultivation. Earnings are expected to rise due to the product export potential to competitive international markets such as Japan.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes