PM agrees to support policy for Bình Sơn Refining & Petrochemical

Update: July, 13/2016 - 07:00
A view of Dung Quất oil refinery in Quảng Ngãi Province at night. On Wednesday, the Government agrees to support the refinery with a more favorable policy to help it compete with imported petroleum products. — VNS/VNS Photo Nguyễn Đăng Lâm
Viet Nam News

HÀ NỘI –  Prime Minister Nguyễn Xuân Phúc has agreed to support a request by Bình Sơn Refining & Petrochemical Co Ltd to adopt a more favorable policy to help its Dung Quất oil refinery compete with imported petroleum products.

At a meeting in Quảng Ngãi Province on Wednesday with heads of the company, the Prime Minister said he would support BSR’s proposal at next week’s regular meeting of the Government with the aim of ensuring the effective implementation of market principles and equality among businesses.

Nguyễn Hoài Giang, chairman of Bỉnh Sơn Refining & Petrochemical (BSR), explained that volatility in the global oil market and changeable foreign exchange rates have been putting pressure on the performance of Dung Quất oil refinery.

Giang said the first seven months of this year were a difficult time for oil producers with prices running wild. Specificallly, unfavorable tax policies on petroleum products have reduced the competitiveness of Dung Quất Refinery vis-a-vis imported goods, which enjoy preferential tariff rates offered by free trade agreements, he said.

He called on the Government to adopt a more favorable policy enabling a fair competition environment and helping to stabilize production at the Dung Quất Refinery and make it more appealing to investors.

This is not the first time BSR has sought approval for a tax reduction due to low competitiveness.

Last April, the Ministry of Finance cut import tariffs on petrol from 35 per cent to 20 per cent and 30 per cent to 20 per cent for diesel.

Since the start of its commercial operation in February 2009, Dung Quất Refinery has produced 41.37 tonnes of petrol products. It has earned a total of VNĐ764.63 trillion (US$34.3 billion) in revenues and VNĐ6.17 trillion in net profits.

In the last seven years, it has contributed nearly VNĐ130.2 trillion to the State budget.

This year, between January and July, the refinery produced nearly 4 million tonnes of petrol products, taking VNĐ40 trillion in revenues and nearly VNĐ1.1 trillion in net profits.

However, the Prime Minister stressed the importance of the safe operation of the oil refinery and encouraged the company to improve its corporate governance to reduce cost and enhance the value of petrol and petrochemical products.

In December 2014, the Government approved an $1.8-billion plan to upgrade and expand Dung Quất refinery’s capacity from the current 6.5 million tonnes per year to 8.5 million tonnes per year by 2022. Work is scheduled to be completed by 2021. – VNS