Demand slump cuts into Vietnam's March product imports

Vietnam's oil product imports in March were at the lowest monthly levels since January 2017 as the Covid-19 pandemic continues to hit demand.

While Vietnam is a net product importer, imports had already been faltering after the start-up of the 200,000 b/d Nghi Son refinery in November 2018, its second refinery after the 145,000 b/d Dung Quat.

The country took a total of 482,415t of gasoline, diesel, fuel oil and jet fuel in March, the lowest for a month since January 2017, according to preliminary customs data. The previous low was 504,518t in February 2019. Most of Vietnam's imports come from South Korea, Singapore and China.

Vietnam's March jet fuel and gasoil imports were also at the lowest monthly levels since January 2017, at 110,444t (28,000 b/d) and 193,311t (47,000 b/d) respectively.

Vietnam is a net importer of gasoil but Nghi Son refinery started offering gasoil cargoes from the end of February. Vietnam's gasoil demand has been dampened since February following the Covid-19 outbreak that has curbed transport fuel use amid movement restrictions.

Jet fuel demand fell as Vietnam reduced flights since February following the coronavirus outbreak. The country banned the entry of all foreigners from 22 March, except for those on diplomatic or official purposes or other special cases. Vietnam Airlines has suspended all international flights through the end of April and most domestic routes until further notice.

State-owned downstream firm Petrolimex also does not plan to import any jet fuel in April or May. The only deliveries expected are around 10,000t that was pushed back from February to April arrival, market participants said.

PetroVietnam has also warned that domestic refineries are at risk of shutting down amid the unprecedented drop in transportation fuel demand, swelling inventories and the collapse in oil prices.

Vietnam started a nationwide social distancing exercise for 15 days from 1 April. The government asked Vietnamese residents to stay at home, although they can still go out for food, essential data-x-items and urgent medical services. This lockdown will be extended until the end of April for Hanoi, Ho Chi Minh city and provinces deemed to have high Covid-19 infection risks, pointing to further falls in fuel demand.

by Sarah Giam

source: Argus Media