Laos is beginning to run out of gas, sources in the country say.
Filling stations began to post signs reading “No Gas” or “Temporarily Closed” around Nov. 1, and supplies have fallen since. Some motorists have decided to stay home, unwilling to risk driving their motorcycles or cars for fear of running out of fuel on the road.
“We’re in a situation now where it’s getting harder to find gas,” one motorist told RFA’s Lao Service on Nov. 2, speaking like other sources for this story on condition of anonymity.
“And we don’t want to buy gasoline in bottles or other containers from vendors on the street, because we don’t know if they’ve mixed it with water or other substances.”
“Gasoline is usually orange, but gasoline bought on the street looks clear, like water,” he said.
A car owner in the capital Vientiane said his neighborhood gas station hasn’t had gas since Nov. 1. He tried other stations nearby and finally found some fuel at the fifth he visited.
The Lao government should solve this crisis quickly, he said.
“Gasoline is not only getting scarcer but also more expensive. And a lot of people are suffering more because they’re getting paid less,” the source said. “For example, because of the COVID-19 pandemic, I’m working only half time and am getting paid about 50 percent of my usual salary.”
“I’m staying home now because of the travel restrictions and the gas shortage,” he said.
A motorist in Vientiane’s Naxaythong district said all gas stations in his Elay Tai village were closed, and that anyone needing gas must now buy it on the street.
“These street vendors are very smart,” the source told RFA.
“Knowing that the shortages were coming, they bought a lot of gas and then hoarded it to sell in bottles or other containers for more money, purchasing it at $1.00 a liter and then selling it at $1.30. This problem must be solved!” he said.
Long lines of vehicles quickly form at pumps that do still have gasoline, residents of the capital said.
“A lot of people are going to the gas station at Don Tiao village with containers to buy gas, because they think that the gas shortage will get worse, and many other pumps in the area have already been closed because of the shortage,” he said.
A gas station owner in the Pakkading district of Borikhamxay province, near the capital, said he can’t get any gasoline either.
“I’m not hoarding gas. I’m just not getting any,” he said.
High exchange rates, fraud
High currency exchange rates and fraud are both to blame for the country’s shortage of gas, government officials and bank employees told RFA, asking for anonymity in order to speak freely.
The exchange rate between the U.S. dollar and the Lao currency, the kip, is so high that the Lao State Fuel Company can’t afford to increase supply to meet the demand, an employee of the company told RFA on Nov. 4.
“Our fuel company has less foreign currency, imports less gas, and distributes less gas to the pumps. That’s why we’re short of gas. However, the shortage is only temporary and will be solved soon,” he said.
A bank employee said that a low currency exchange rate fixed by the government at 9,100 kip to the dollar is driving business to the black market, where 11,000 kip per dollar can be exchanged.
“On trade, Laos’ revenue in foreign currency dropped by 60 percent this year,” he said.
Gasoline importers have defrauded the government at the same time, causing a loss of $200 million in revenue during the first nine months of the year, an official at the central government’s Ministry of Finance said.
“They evaded taxes and declared lower amounts of gasoline imported, or even the wrong kind brought in,” he said. “For example, a company might import 1,000,000 liters of gasoline, but declare only 800,000 liters to the tax authorities. Or they would say it is was diesel and not gas.”
On Nov. 5, the Ministry of Industry and Trade issued a notice raising the price of gasoline for the 17th time in the last four months, with the cost of super-grade gas now jumping by $0.08 per liter, regular gas climbing by $0.02 per liter, and diesel climbing by $0.05 per liter.
“You can say that this shortage has now become a crisis,” an official at the Ministry of Industry and Trade said. “We have tried to lower the taxes on gas prices in order to keep prices low, but we can’t keep going like this because we don’t have the money.”
“So we have no choice but to raise the prices. If we don’t do this, we’ll have less and less gas,” he said.