Laos is again running out of gasoline, an indication that the country is still too dependent on its neighbors for fuel supplies and has failed to build adequate reserves following severe nationwide shortages in 2022.
Specifically, diesel fuel is hard to come by these days, as station after station has put up makeshift signs saying they are all sold out, urging lines of hundreds of vehicles to turn back and refuel elsewhere.
Diesel, as opposed to regular gas, is important for shipping and commerce and necessary to keep supply lines open.
The Lao government raised the official price of fuel four times in January alone, even though gas prices have been falling in the rest of the world.
“I waited at the gas station for half an hour for diesel,” a motorist in the capital Vientiane told RFA Lao on condition of anonymity for security reasons. “A few hours later the station was completely out.”
He was only allowed to purchase 200,000 kip (US$9.66) worth of diesel at each station and had to drive to several stations to fill up the tank.
The motorist compared the situation to 2022, when gas shortages were but one indication of the country’s severely ailing economy at the time.
He was only allowed to purchase 200,000 kip (US$9.66) worth of diesel at each station and had to drive to several stations to fill up the tank.
The current price of diesel in Vientiane is 20,780 kip per liter ($3.76 per U.S. liquid gallon), up 600 kip (three cents) from last week.
A truck driver in the southern province of Savannakhet ran into a similar issue while trying to refuel there, saying he was turned away at several stations before finally getting a chance to refuel.
“I put more than four-million-kip (US$200) worth of diesel into my truck,” he said. “I’m afraid that the shortage will soon get worse.”
A gas station attendant in Vientiane told RFA that most stations do have regular gas to sell, but are out of diesel.
“I just asked my boss, who said we don’t have any diesel right now and we have no idea when we’ll have more,” he said.
An attendant in Savannakhet said they were running out at the station he works at.
“We have only about 1,000 liters (about 266 gallons) of diesel left, so since yesterday, we aren’t selling diesel to large vehicles like tractor trailers, only to small cars.”
An employee of a fuel import company in Vientiane said that to ease the shortage it distributed 4,000 liters of diesel to each gas station in the capital on Wednesday morning.
But a gas station attendant said that the 4,000 liters would be sold in only two hours.
We’re working on it
The government has been frantically trying to fix the problem, an official from the Lao Ministry of Industry and Trade told RFA.
“All relevant departments of the government are trying to solve the shortage,” he said. “They’ve already issued a couple of announcements this morning.”
A statement from the Lao Fuel and Gas Association on Tuesday said the reason behind the shortage was that key oil refineries in neighboring countries like Thailand and Vietnam have suspended production to upgrade their production lines, and that they should resume production by the end of the month.
The Interior Trade Department, the Ministry of Industry and Trade and the Lao Fuel and Gas Association have, meanwhile, been in talks with fuel importers and distributors to try to find solutions.
On Wednesday morning, the Interior Trade Department said in a statement that Laos imports 140 million liters (37 million gallons) of fuel per month, 80% of which is diesel. In January alone, Laos imported 106 million liters (28 million gallons), not enough for the rest of the month – especially because demand is expected to increase as the shortage is prolonged.
Price spike
The prices keep going up because the kip is again depreciating against the U.S. dollar, an official from the Ministry of Industry and Trade told RFA.
“We buy gasoline in U.S. dollars from other countries and sell it in kip,” he said. “When we want to buy more gas, we have to exchange the kip for U.S. dollars. To keep up with the depreciation we have to raise prices.”
The kip had been only slightly declining against the U.S. dollar until late 2021, when it fell off a cliff. According to xe.com, in September 2021 $1 was worth about 9500 kip. By the end of 2022 it had passed the 17,000 mark. The kip stabilized in the beginning of 2023, but continued its decline in April and passed the 20,000 mark in September, before stabilizing again at around 20,500 in the last few months of the year.
The nationwide gas shortage is partly due to a shortage in foreign currency, the English-language Vientiane Times, a mouthpiece for the Lao government, reported Wednesday.
The report also mentioned the temporary closure of an oil refinery in Thailand, saying that the Ministry of Industry and Commerce and the Lao Fuel and Gas Association were trying to buy diesel fuel from other sources to fill the gap.
Translated by Max Avary. Edited by Eugene Whong.
This content originally appeared on Radio Free Asia and was authored by By RFA Lao.
This post was originally published on Radio Free.
