Prime Minister requests to monitor information on prices and the ability of Malaysia to supply gasoline to Vietnam

On June 3, the Ministry of Industry and Trade reported on clarifying information on petrol prices and Malaysia’s ability to supply petrol to Vietnam. Prime Minister Pham Minh Chinh asked Minister of Industry and Trade Nguyen Hong Dien to closely monitor and coordinate with relevant agencies to review and handle the matter according to regulations.

Previously, the Ministry of Industry and Trade sent a document to Vietnamese Ambassador to Malaysia Tran Viet Thai requesting clarification of information about gasoline prices and Malaysia's ability to supply gasoline to Vietnam that was published in some electronic newspapers.

Current gasoline and oil prices in Vietnam. Photo courtesy

The information also said, "to ensure stable gasoline prices and help diversify Vietnam's gasoline supply market, the Malaysian Government agreed to export 300,000 liters of RON95 gasoline to Vietnam at a friendly price, but so far it has not been implemented much."

According to the Ministry of Industry and Trade, Malaysia is a major producer and exporter of petroleum in the world. This country does not apply taxes but has a subsidy policy for petroleum consumed domestically. Currently, the Malaysian Government is subsidizing 1.65 RM (equivalent to 0.4 USD) for each liter of RON95 gasoline and 1.85 RM (equivalent to 0.45 USD) for each liter of diesel.

Therefore, the petroleum management agency believes that without government subsidies, Malaysia's gasoline prices would be equivalent to those in Vietnam if Vietnam did not impose taxes. Specifically, Malaysia's RON95 gasoline price is 0.87 USD/liter, while Vietnam's gasoline price is 0.86 USD/liter if taxes and fees are excluded.

Meanwhile, Malaysia's policy only applies to locals. Even foreigners in Malaysia are not subsidized when buying gasoline, so the country's exported gasoline is sold at the common market price of the region.

The Ministry of Industry and Trade cited that recently, some Vietnamese enterprises have had to import gasoline from the Malaysian market at prices equivalent to those from Asian markets such as Singapore.

On that basis, the Ministry of Industry and Trade requested Mr. Tran Viet Thai to explain and provide information related to supply sources, export prices, and support connections so that Vietnam can buy gasoline from Malaysia at the announced prices and take responsibility for the information provided.

A representative of the Ministry of Industry and Trade said that it is very difficult to import gasoline from Malaysia at the price of 13,000 VND/liter because this country only applies tax exemption and subsidies for the people.

Meanwhile, the amount that this country exported, which is reported to be 300,000 liters, is only a very small percentage, equivalent to only about 1% of the country's daily gasoline consumption, enough for a gas station in a big city to sell for 5 days because the current gasoline consumption demand of the whole country is about 20 million liters/day.