The Petroleum Trading Lao Public Company (PetroTrade), Laos’ second largest fuel importer and distributor, has warned members of the public not to panic or to stockpile fuel, saying the current shortage does not constitute a crisis.
The company promised that it would provide sufficient fuel for petrol stations throughout the country, especially in specific areas of Vientiane and the provinces, until a long-term solution could be found.
The firm supplies 150 petrol stations across Laos, which are normally open 365 days a year from 6am to 10pm. But at present they are open only from 7am to 5pm because the company does not have sufficient foreign currency reserves to buy enough petrol to sustain full service.
Being fully dependent on imported fuel, Laos must pay for all of its supplies in foreign currency. But the current shortage of foreign currencies combined with the weak kip has forced importers to put the brakes on purchases.
“Some importers have no foreign currency to buy fuel from other countries and some petrol stations have closed. This has led to panic buying and lots of people flocking to buy petrol to stockpile,” said the Chairman of the Board of Directors of Petroleum Trading Lao Public Company (PetroTrade), Chanthone Sitthixay, when addressing a press conference on Friday.
In a bid to reassure members of the public, he said his company had adequate stocks and was able to allow everyone to obtain fuel.
“I sincerely urge everyone not to panic. We are not in a state of crisis, just going through a difficult patch because we cannot get more foreign currency. The situation will improve if everyone shares what is available and does not hoard petrol in the hope of making a profit,” Chanthone said.
He attributed the shortage of fuel at some petrol stations to panic buying on the part of irresponsible individuals.
“In reality, people’s mindset changes when they think there will not be a drop of fuel available the next day. They become overly concerned, resulting in panic buying and the stockpiling of fuel. People are also worried about exchange rates, and are also hoarding foreign currencies,” he said.
Chanthone, who is working alongside the government as part of a committee seeking solutions to the fuel crisis, said he is collaborating with the Bank of the Lao PDR (BOL) in the hope of resolving the problem.
“Laos is not experiencing a trade deficit, but we believe that foreign currencies are being privately stockpiled because sentiment is driving people to act irrationally. This is blocking the availability of foreign currencies in the wider market. The result is that fuel importers are struggling to access foreign currencies, which are costing more to buy because of the weak value of the kip,” he said.
“In order to solve this problem immediately, we should not panic. This situation occurred in other countries in the past, but people there formed orderly lines to buy fuel, which didn’t cause any problem at all,” he added.
Chanthone said his company and the Lao Fuel and Gas Association will continue to import fuel to meet public demand and he was confident that there were sufficient supplies so long as people are prepared to share, and not store fuel in bottles and tanks just to make a profit.
Laos’ fuel consumption amounts to 1,200 million litres per year or about 100 million litres a month which, compared to the amount of fuel produced and available on the world market is a minuscule quantity, he added.
“Members of the public should not worry too much about a shortage of fuel. We will continue to keep petrol stations open and ensure a supply sufficient of petrol until the end of this year or until we can source more foreign currency,” Chanthone said.
PetroTrade was founded in 2008 with the vision of delivering quality oil at a fair price to all sectors of society. It is a registered public company and was listed on the Lao Securities Exchange (LSX) in 2014 to attract Lao and foreign investors as shareholders.
VIENTIANE TIMES/ASIA NEWS NETWORK