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Diesel Supplies Back To Normal Next Month

Source: Vientiane Times

The Lao Fuel and Gas Association has confirmed that diesel will again be in regular supply at petrol stations from the beginning of next month, following a shortage since the end of December.

In the meantime, supplies of premium and regular grade petrol are available as normal, the Association said.

The diesel shortage is the result of the closure of a large oil refinery in Thailand while the production line is upgraded, so there is currently a shortage of diesel in Thailand which means that exports have been curtailed, the Association added.

The refinery maintenance period, which is expected to run until the end of January, prompted the Thai energy ministry to issue directives to oil traders, halting the export of diesel to ensure sufficient supplies were available in Thailand. Laos’ fuel supplies, especially diesel, are mostly sourced from oil refineries in Thailand, so when Thailand experiences a supply shortage there is an inevitable knock-on effect in Laos. Only just over 10 percent of Laos’ fuel needs are met by Vietnam because of the high cost of transport.

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Over the past week, the surge in fuel consumption has outpaced availability, so some petrol stations are no longer selling diesel, leading to long queues at other stations and raising concerns about a potential widespread fuel shortage as occurred in 2022.

Despite concerns about fuel shortages in Laos, the Association assured motorists that fuel supply is currently “manageable” but may not meet the rising demand.

Every petrol station operated by the Lao State Fuel Company (LSFC) has larger stocks of diesel than other petrol stations because the company is a priority government oil importer.

However, motorists should use fuel sparingly and not travel unnecessarily, so that sufficient reserves are available for farming and other essential activities.

In the first month of this year there have already been four changes in the price of fuel price, three of which were increases.

As of January 21, Laos had imported 106 million litres of fuel, including 21 million litres of gasoline, 80 million litres of diesel, and 5 million litres of other fuel. Although lower than the December 2023 figures, the Association noted that this might not be sufficient to meet the current rise in demand.

The consumption of fuel in Laos has soared in recent years in line with economic growth. To resolve the issue in the long term, the Lao Fuel and Gas Association, together with the ministries of Industry and Commerce, Energy and Mines, Foreign Affairs, and the Bank of the Lao PDR, is looking at alternative sources of fuel in order to ensure no shortages occur in the future.

The Chinese government has suggested that Laos invest in a logistics system that would enable fuel to be imported from China using the Laos-China Railway, but this would be very expensive, the Association said.