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Supply short, enterprises have to borrow gas to sell
The short supply of gas over the last week has caused some producers to lack products to deliver to clients, which has forced them to borrow gas from other producers.
It is estimated that some five producers have halted providing gas, explaining that their production falls short to meet the demand. As the supply has become short, a lot of sale agents have shifted to sell the products of other companies. However, distributors and retailers have been reassured by producers that they are still able to provide enough products.
The short supply appeared late last month, and in order to maintain operation, enterprises have to borrow gas from other producers or make definitive purchases from them.
Do Trung Thanh, Deputy Head of the Business Division of Saigon Petro, confirmed that many enterprises asked to borrow gas from Saigon Petro while waiting for the gas imports to arrive. However, Thanh said, Saigon Petro cannot meet all the demand while some enterprises have to make definitive purchases.
The supply has become short because Vietnamese enterprises did not make big imports in the last four months as they saw the prices on the decrease. However, with the hostilities unexpectedly escalated in the Middle East, and then Russia deciding to stop providing gas to Ukraine has both pushed the gas price increase by US $42.50 per tonne.
As the result, the loyal gas suppliers to Vietnam in South Korea, China, Malaysia, and Singapore have reduced the sales and become late in delivering. Even some contracts, which have been signed before, have been cancelled.
The director of a gas company said that the current shortage may last for several more months, as suppliers still have not made offers to the February contracts.
However, gas firms still hope that the supply shortage will be settled in a few days, as many gas tankers are arriving.
Experts said that the domestic gas market much depends on the world’s supply as domestic production can meet just 30% of the demand. Meanwhile, companies cannot make big imports to store up due to the limited capacity of store depot system.
Saigon Petro, which is holding a big market share in the south, now has the deposits big enough to store 7,000 tonnes, which is big enough to meet the market demand for one month. Gia Dinh Gas’ system can keep 3,000 tonnes, Elf Gas 1,700 tonnes and VT Gas 1,000 tonnes.
Right at the end of December 2008, gas distributors were warned that the gas price may increase dud to the higher demand for gas when the world has entered the cold winter.
At that time, Managing Director of Petronas, Lai Duc Nam, said that the gas consumption soared by 20% in the remaining days of the last year. The distributors explained that they tried to get more gas to sell early in the New Year. However, Nam said that it was possible that the distributors tried to store up gas to sell later when the prices increased.
The gas price increase has caused a big surprise to gas traders. No one could imagine that the gas price would increase in the context of the oil price continuing to decrease.
Saigon tiep thi
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