Vietnam has been grappling with gasoline and diesel shortages for weeks after its main refinery cut production last month and forced the Southeast Asian nation to tap its strategic national reserves to alleviate the supply crunch.
Hundreds of gas stations across Vietnam have had to close because they have run out of fuels, while the price of gasoline was raised to a record-high earlier this week as international crude oil prices rallied.
Vietnam will be auctioning more than 26 million gallons of gasoline from its state reserves, state media in the Communist-ruled country reported on Tuesday.
On Monday, Vietnam raised the price of the most sold variety of gasoline by almost 3.8 percent to a record-high. This brought the gasoline price hike to 12.8 percent this year alone, as international crude oil prices soared amid tight global supply and the geopolitical risk premium over the Russia-Ukraine crisis.
The tight fuel supply in Vietnam was the result of the limited production at Nghi Son, one of the two refineries in the country with a capacity to process 200,000 barrels of crude. Due to a cash crunch and disagreements among shareholders over how to pay for procuring crude, the refinery has been operating at reduced capacity since the middle of January.
The Nghi Son refinery, which supplies one-third of Vietnam's fuel consumption, is currently operating at a capacity of between 55 percent and 60 percent, according to Reuters.
In addition, a power outage at the refinery early this week forced some processing units to shut down, two sources with knowledge of the matter told Reuters on Tuesday.
As Vietnam seeks to alleviate and supply crunch amid soaring crude and fuel prices, Prime Minister Pham Minh Chinh has also asked the country's trade and finance ministries to consider reducing the environmental tax on fuels, local outlet VnExpress reported on Tuesday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More