Vietnam plans to reserve up to 1.5 mln tons of oil

Vietnam plans to reserve up to 1.5 mln tons of oil

A gas station in Ho Chi Minh City. Photo: Diep Duc Minh

As oil prices sink to five-year lows, Vietnam will reserve between 1 million and 1.5 million tons of crude and oil products, the government office said Friday.

Prime Minister Nguyen Tan Dung has approved the reserves plan, which was drafted by the Ministry of Industry and Trade and the state-owned giant PetroVietnam, the office said.

PetroVietnam, which operates the country’s sole refinery, said it plans to build an oil storage base that can keep 1 million tons of crude and petroleum products.

Vietnam set this year’s budget based on oil at US$100 a barrel. PM Dung, however, is optimistic that the economic growth target of 6.2 percent for 2015 is still possible.

The plunge in global oil prices will “do more good than harm” to the economy, Dung said at a cabinet meeting Friday.

If oil prices fall to US$40, the state budget will lose about VND10 trillion ($462.73 million), but the government can still manage its targets of revenues and spending, as well as an inflation rate at 5 percent this year, Dung said.

He also urged urged ministries and local governments to improve their investment environment and remove difficulties for businesses, especially small and medium-sized ones.

On January 30, global oil prices rebounded with those in US up 8.3 percent to be traded at $48.24 per barrel, while global benchmark Brent crude surged to $53.08, international media reported.

However, Reuters quoted a group of economists and analysts as forecasting that crude oil will likely continue decreasing before seeing a mild recovery in the second half of this year.

Brent crude was expected to fall to $42 per barrel and WTI $40 by the end of the first quarter.

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