HÀ NỘI — The central province of Quảng Ngãi urged the Government to provide policy incentives for Dung Quất Refinery equal to those enjoyed by Nghi Sơn Refinery to ensure fair competition.

In a proposal sent to the Government, Chairman of Quảng Ngãi Province People’s Committee Trần Ngọc Căng said the petrol and oil market was witnessing a supply surplus after Nghi Sơn Refinery went into operation and started selling its products in May.

As of September, Nghi Sơn Refinery had pumped nearly one million cu.m of petrol and oil into the market. While domestic demand remained low, the proposal reported that the market had a supply surplus of around 800,000 cu.m.

The excess of supply over demand made things difficult for Dung Quất Refinery.

Meanwhile, the province said the refinery was enjoying less preferential tax policies than Nghi Sơn Refinery in Thanh Hóa Province.

Dung Quất Refinery mainly imported crude oil from Azerbaijan which was subjected to an import tax of 5 per cent. In comparison, Nghi Sơn Refinery was enjoying a zero per cent tax on its crude oil imports.

The document also said Dung Quất was facing difficulties raising capital to expand and upgrade the refinery as the Government would not guarantee loans.

Seeking equal treatment, the province asked the Government to remove the import tax on crude oil from Azerbaijan.

The province asked the Government to allow Dung Quất Refinery to continue production of Euro 2 emissions standard products until the factory completes its expansion.

Trần Viết Ngãi, Chairman of the Việt Nam Energy Association, was quoted by Đất Việt newspaper saying the biggest difficulty for the refinery was the shortage of capital needed to implement the expansion project.

The expansion project needed a total investment of US$1.8 billion, $1.27 billion of which must be borrowed and required a Government guarantee for the loans.

However, Đinh Trọng Thịnh from the Academy of Finance said the refinery could not be an exception as the Government reserved loan guarantees for enterprises that need to control debts within the safety zone.

Thịnh also disagreed with Quảng Ngãi Province’s proposal of eliminating the import tax on Azeri crude oil for the refinery.

He said that in a market economy, enterprises must seek for reasonable supply source. He asked why Dung Quất Refinery did not import crude oil from countries with lower import taxes.

Quảng Ngãi’s proposal of allowing the refinery to continue producing Euro 2 emissions standard products deserves careful consideration, Thịnh said, adding that Euro 2 fuel products were no longer appropriate to Việt Nam and many other countries.

According to the roadmap, Dung Quất Refinery must provide Euro 5 emissions standard products from 2022. — VNS