Over the weekend, Vientiane Capital started experiencing an increase in the number of vehicles lining up at petrol stations, raising worries about an upcoming fuel shortage. Residents’ reports suggest that numerous stations have exhausted their diesel stocks, with some now encountering shortages in both diesel and gasoline.
The Lao State Fuel Company (LSFC) issued an official announcement addressing the growing apprehension. It revealed that key oil refineries in neighboring countries, such as Thailand, which is a crucial supplier for Laos, have temporarily halted production lines to upgrade fuel standards. This has resulted in decreased fuel exports to Laos, causing higher prices and potential shortages, particularly in diesel.
“Over the past week, a notable surge in fuel consumption has outpaced the available petrol station supply, especially for diesel fuel,” an announcement stated. “Consequently, some stations have temporarily ceased diesel services, leading to queues at certain stations and raising concerns of a potential widespread fuel shortage akin to last year’s incident.”
In Thailand, the government has temporarily suspended diesel exports for traders during the maintenance period of Thai Oil’s No. 3 crude distillation unit (CDU) to prevent potential local shortages.
A CDU is a specific component of Thai Oil’s refinery infrastructure that processes crude oil to produce various refined products such as gasoline, diesel, jet fuel, and other petroleum-based products.
The maintenance period, 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 domestic diesel supply.
Despite concerns about fuel shortages in Laos, especially for diesel, LSFC assured the public that the fuel supply is currently “manageable” but may not meet the rising demand.
To address the issue, LSFC further stated that normal production is expected to resume by the end of January, assuring that the Lao Fuel and Gas Association (LFGA) and the Ministry of Industry and Commerce (MOIC) are working with oil importing and distribution companies to expedite fuel supply and ensure diesel availability normalizes within the week.
In the first month of 2024 alone, the country underwent four fuel price adjustments, three of which resulted in price increases.
As of 21 January, Laos imported 106 million liters of fuel, including 21 million liters of gasoline, 80 million liters of diesel, and 5 million liters of other oils. Although lower than the December 2023 figures, LSFC noted that it might not meet the current rising demand.
Similar incidents occurred in previous years. In 2023, many petrol stations reportedly closed down, indicating a potential resurgence of fuel shortages in Laos. Fuel companies, including PTT Lao Limited, encountered difficulties in exchanging foreign currency for fuel purchases, driven by the depreciation of the Lao kip and global oil price increases.
This situation raised concerns similar to the nationwide fuel crisis experienced in 2022. However, the Lao government later reassured residents that the country’s fuel distribution is stable, responding to concerns raised by PTT Lao Limited about potential fuel shortages.
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Update: The Ministry of Industry and Commerce in Laos has released a statement regarding the alleged fuel shortage in the country, following concerns raised by residents in Vientiane Capital over the past few days.
According to Lao state-media Pasaxon News, due to Laos’ reliance on importing fuel from neighboring Thailand and Vietnam, the unplanned shutdown of crude distillation unit 3 (CDU-3) belonging to the Thai Oil Public Company Limited has forced a fuel shortage.
Since the start of the year, Laos has imported 21 million liters of petrol, and 80 million liters of diesel. Although the reserved fuel was enough to sustain the needs of the residents of the country, a spike in consumer purchases over the past week has led to petrol stations shutting down.
The Internal Trade Department of the Ministry of Industry and Trade, together with the Lao Petroleum and Gas Association, are working with fuel-importing companies to expedite the provision of oil from neighboring countries and address the issue.
According to Thai Oil’s press release on 16 January, the company will undergo maintenance on CDU-3 for approximately 13 days, with operations planned to return to normal by the end of the month.
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